Monday, April 14, 2014

NME caught in debt-fuelled deal

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 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.
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.

And being bought with a slew of debt isn't a great start for an organisation with a few wobbly titles in its portfolio.