03.11.08 Catherine Neilan writing in The Bookseller
US credit insurer Euler Hermes ACI has withdrawn its approved limit on Borders Group Inc, reducing cover for firms trading with the American retailer "to nil". The decision has been communicated to publishers worldwide and was made on 17th October.
In a document seen by The Bookseller, EH ACI said the move related to Borders Group’s continuing losses.
In August, the retailer reported a second quarter loss of $11.3m (£6.89m) and the most recent full-year statement, to 2nd February 2008, showed a total loss of $157.4m (£100.9m), up on the previous year’s $151.1m.
A spokesman for EH ACI declined to comment specifically on Borders, but said withdrawal of cover was becoming increasingly common, particularly in retail, as a result of "vigilance" during the downturn.
A spokeswomen for Borders UK, which is 17% owned by the US company, said. "This has absolutely no implications for Borders UK. EH has not withdrawn cover from the UK and there is no trail back from the US to us."