A New York hedge fund manager may control the fate of Borders Group Inc., even as the distressed Ann Arbor-based book store chain advertises to hire several people for its digital division.
Borders faces a critical April 1 deadline to repay a $42.5 million loan owed to Pershing Square Capital Management, a hedge fund managed by investor William Ackman, who’s already renegotiated the loan three times.
Ackman could opt to extend the loan again, giving Borders more runway to pursue a profitable business model. But if he decides to force repayment, Borders may be forced to fork over cash vital to its daily operations.
Borders had $32.8 million in cash as of Oct. 31, down from $38.4 million at the same point in 2008.