The entity which owns many leading newspapers like The New York Times, The International Herald Tribune among others, has entered into an sale-leaseback transaction.
Media conglomerate The New York Times Company on Monday said it will raise 225 million dollars through a sale-leaseback transaction for a part of the space at its headquarters in the city.
The entity which owns many leading newspapers like The New York Times, The International Herald Tribune and The Boston Globe, among others, has entered into an sale-leaseback transaction with investment company WP Carey & Co LLC.
The move would help the firm pay back debts and also boost its cash position, as the newspaper industry faces tough times in the wake of the global financial meltdown.
Recently, the firm had borrowed 250 million dollars from Mexican billionaire Carlos Slim Helu. It had also suspended dividend payment.
"The New York Times Company and investment firm WP Carey & Co LLC announced on Monday that they had entered into a sale-leaseback transaction for 225 million dollars for part of the space that the Times Company owns in its New York headquarters," it said in a statement.
According to the firm, the lease term is for a period of 15 years. The New York Times Company has an option to repurchase the condominium interest for 250 million dollars during the tenth year of the lease term.
"The rental payment will be 24 million dollars for the first year and will escalate through the term of the lease. The Times Company plans to use the proceeds to retire long-term debt," the statement said.
The transaction encompasses 21 floors, or about 7,50,000 rentable sqft area, currently occupied by the company.
"WP Carey was able to clearly understand our company, our facility and our objectives... It's history and outstanding reputation in the sale-leaseback industry gave us the confidence that it would be the right firm with which to do this transaction," the New York Times Company's president and CEO Janet L Robinson said.
Commenting on the transaction, WP Carey's president and CEO Gordon F DuGan said, "We are proud to work with such a world-class media company and to purchase such a world-class asset.
"Today's economic environment presents incredible challenges and opportunities, and we look forward to adhering diligently to the defensive, risk-management driven investment strategy that has provided historically solid performance".
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