Borders Stock Gains on Unit Sale

Borders is surging after it announces a deal to sell its stationery unit for $31 million.
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NEW YORK (

TheStreet

) --

Borders

(BGP)

is surging Tuesday afternoon following the news that the company will sell off its stationery unit and will use the proceeds to pay off debt.

Borders said Primary Capital, a British private-equity group, agreed to buy Paperchase Products for $31 million. The book retailer will then use $25 million of that to pay down its $90 million term loan credit facility.

The announcement comes after Borders launched its own e-bookstore last week to catch up to rivals

Barnes & Noble

(BKS) - Get Report

and

Amazon

(AMZN) - Get Report

.

Shares of Borders are gaining 11% to $1.63 in afternoon trading.

-- Reported by Jeanine Poggi in New York.

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