In a rather edgy back and forth between
Michael Hirschorn of the Atlantic and Catherine Mathis, SVP Corporate Communications at the NYT, each one blames the other for calling the kettle black. Turns out Mike said NYT will file for chapter 11 in May, roughly around the time their credit facility expires
as we already noted, the market might be underestimating the probability of its presumed imminent demise if recent CDS levels are any indication.
The facts that the NYT does not dispute are the following:
• We have two revolving credit agreements.
• These are agreements with banks that allow us to borrow up to $400 million under each agreement, or $800 million in total, whenever we need it. We repay what we have borrowed as cash comes in and the amount we can borrow is then replenished.
• One of our agreements will expire in May 2009 and the other in June 2011.
• As we have said publicly on more than one occasion, because we believe we need significantly less than the total $800 million available credit, we do not plan to replace the full $400 million that is expiring in May. There is no need to do so.
• We are in the process of pursuing a sale-leaseback for up to $225 million for some of the space we own in our headquarters building
Where they seem to disagree is whether or not NYT follows in poor Nortel's footsteps in a 4 brief months.
So listen up Scott Galloway, Phil Falcone and Sulzberger best friend Steve Rattner - now is a time to step up, and either dump some more cash in this phenomenally performing business or turn the spin machine on turbo.
Sphere: Related Content
I guess the expression "throwing good money after bad" hasn't quite made it to Tijuana yet. NYT reports that Carlos Slim is about to invest $250 million of 10 year 10% convertible preferred stock and that the New York Times board is meeting on Monday to formalize his investment. Surprisingly Slim is "not expected to get any representation on the company’s board or any shares with special voting rights like those of the Sulzberger family, which controls the company." As we speculated, this is odd, seeing he has already lost over $70 million on his initial NYT investment. But let the man dream. In the meantime, mufkateer Galloway should be happy the Mexican has bought him some more time to prepare for the final duel with Connor MacLeod.
Sphere: Related Content
