March 10, 2009
NY Times Attempts To Pay Down Debt
The New York Times Co. has finalized a sale-leaseback agreement for part of its Manhattan headquarters, in a move aimed at raising cash to pay down its debt, the newspaper company announced on Monday.
The Times raised $225 million through the deal with investment firm W.P. Carey & Co. LLC for 21 floors of the newspaper's 52-story Renzo Piano-designed headquarters on Eighth Avenue, according to a statement the company released.The statement said that the lease term is 15 years and the Times has an option to repurchase its share of the building for $250 million after 10 years.
This is one of many transactions that the Times has made in an attempt to clear its long-term debt.
Carlos Slim, a Mexican billionaire, has also agreed to provide the company with a $250 million loan.
The Times is also selling its 17.75 percent stake in New England Sports Ventures, which includes the Boston Red Sox and their Fenway Park stadium.
Monday, the newspaper said that it had over one billion dollars in debt at the end of 2008, which has been reduced due to Slim's loan.
However, the Times said it is still facing a principal payment on long-term borrowing of $49.5 million due in November, along with a payment of $250 million due in March 2010.
The newspaper company's net profit dropped 47 percent in the fourth quarter of the year and it recently suspended its dividend for the first time since it went public.
Advertising revenue fell 17.6 percent in the fourth quarter and even online advertising revenue was lower, down 3.5 percent to 81.9 million dollars.
The Times has been struggling with a steep decline in print advertising revenue, falling circulation and the migration of readers of free news online, like other U.S. newspapers.
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