The pending sale of WQXR-FM for $45 million will help the New York Times Co. (NYSE: NYT) chip away at its $1 billion debt, Arthur Sulzberger and Janet Robinson told their staff in a memo posted by The Awl. Tired of having outsiders do it for them, the second memo in as many months from the chairman and CEO runs through the company’s debt situation: “We have been pro-active and disciplined in addressing our long-term debt obligations. ... we strongly believe we have the financial strength and flexibility to manage through this difficult time.”
Some of the “highlights” from the internal PR effort:
—Only $45 million of the company’s approximately $1 billion in debt matures before 2011 and “we expect to repay that in November with cash flow from operations and our revolving credit agreement.” The majority of the debt is due in 2015.
—The company closed down one of its two $400 million revolving lines of credit when it expired in May, using a $250 million loan from shareholder Carlos Slim’s Banco Inbursa and Inmobiliaria Carso. Some of the loan went to repurchase “roughly half” of the $100 million in bonds due in November. “We are paying an interest rate of 14% on the Inbursa debt. Yes, its a high rate, but given the state of our economy, our industry and the credit markets at the time we did the transaction, we believe its both fair and financially sound. ... He has not asked for nor been offered a Board seat and does not have a history of activism in the companies in which he invests.”
—The $225 million from the sale/leaseback deal for a large chunk of the company’s HQ space and other funds went to pay off $250 million in bonds due in March 2010.
—The proceeds of divestitures including WQXR sale for $45 million and the potential sale of the Boston Red Sox—the Boston Globe isn’t mentioned—will go to pay down debt.
By Staci D. Kramer