What: Time inc. will spin off parent company Time Warner and raise US $1.4 billion of debt that will be used to finance the acquisition of IPC Media.
Why it matters: The debt will be raised through an offering of unsecured senior notes and also through a secured loan facility.

TIMEWARNERTime Warner Inc. it’s spinning off parent company Time Warner with US $1.4 billion in debt. The financing will be used to buy Time Inc.’s U.K. operation, IPC Media.

The company is planning to raise the debt through an offering of unsecured senior notes and also through a secured loan facility, according to a statement. However, Time Warner will not be a guarantor or provide credit support for the notes or the loan, the cable company said.

The remaining of the debt after buying IPC will be used to pay a cash dividend back to Time Warner.

Howard Averill ,Time Warner’s chief financial officer, first revealed an US $1.3 billion debt load attached to the Time Inc. spin-off in early February during TW’s fourth quarter earnings call.

Time Warner bought IPC Media, which publishes editions of magazines such as Woman’s Weekly, NME and InStyle, in 2001 for about US $1.7 billion.

According to sources within Time Inc. ,the spinoff may happen by the end of the second quarter.

Sources: Foliomag,WWD

 

 

 

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