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) and Amazon ( AMZN). Shares of Borders are gaining 11% to $1.63 in afternoon trading. -- Reported by Jeanine Poggi in New York. Follow TheStreet.com on Twitter and become a fan on Facebook.