As part of the splitting up of Time Warner into two smaller media companies, the question of who gets to keep IPC Media (and, thus, the NME) has been settled: Time will generate a massive ballon of debt with which to purchase the UK magazine publisher:
Time Warner officially announced that it's spinning Time Inc. off with $1.4 billion in debt, adding that the financing will be used to purchase Time Inc.'s U.K. operation, IPC Media.The suggestion that IPC is worth at the very most $1.4bn will be a bit of a blow to the Blue Fin Building; they were bought for $1.7bn in 2001.
The debt will be raised through an offering of unsecured senior notes and Time Inc. will enter into a secured loan facility, according to a statement.
Whatever remains of the debt facility after buying IPC will be used to pay a cash dividend back to Time Warner.
And being bought with a slew of debt isn't a great start for an organisation with a few wobbly titles in its portfolio.