New York Times will try to raise cash

Posted by Leah McBride Mensching on December 30, 2008 at 5:47 PM

The New York Times Co. has told regulators it might be selling shares and/or other securities in order to raise some seriously needed cash, Reuters reported Tuesday.

The Times has a $400 million payment on one of its two revolving lines of credit due in May, and is already set to borrow up to $225 million against its Manhattan headquarters building.

On Dec. 8, Times Co. spokeswoman Catherine Mathis confirmed that the publisher hired real estate firm Cushman & Wakefield Inc. to assist with refinancing through a mortgage or sale-leaseback agreement. The Times Co. headquarters, a 52-story skyscraper designed by architect Renzo Piano, is located on Eighth Avenue in Manhattan, and is jointly owned with Forest City Ratner Cos. The Times moved into the new building in June 2007.

"While cash will buy the New York Times some breathing space, it hardly solves the long-term problems that are crushing the newspaper business," Reuters blogs reported.

Meanwhile, third-largest publisher in the United States has a remaining $366.3 million in its second line of credit, the bill on which is due in June 2011.

Silicon Alley Insider reported Tuesday that The Times Co.'s plan will "need to involve a major restructuring, including a reduction in the size of the company's editorial operation by at least 40 percent..."

The Insider's Henry Blodget also stated that he believes "any cash the New York Times raises in the current environment will be outrageously expensive. It's also hard to imagine that the company will attract much interest from equity investors until it can articulate a plan for long-term survival that involves something other than selling off non-core assets (eventually, it will run out of these)."