Borders Group has begun delaying payments to its vendors as it seeks to restructure its credit lines, according to published reports (including Publishers Marketplace, which broke the story).  Borders got into its current cash flow crunch last month, when its credit limits under its revolving credit facility were cut after a third party valuation determined that its inventory was worth less as collateral than it was valued by its lenders (see “Borders Borrowing Limits Cut”).  As of early December, the company was in “detailed discussions” on obtaining additional financing, but those efforts have not yet been successful. 

Borders released a statement on Wednesday admitting that it was delaying vendor payments and attempting to restructure those payments, and that it was continuing to try to refinance its senior credit facility.  But the company warned that “there can be no assurance that it will be successful.”