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Sale-leaseback: NYT in talks with W P Carey
January 23, 2009 13:31 IST
Financially troubled New York Times company is in advanced negotiations for a sale-leaseback transaction with an investment and management firm, for its recently built 52-storey headquarters in Manhattan.
The Times group is in talks with W P Carey and Company that specialises in sale-lease deal, the New York Times said, adding under the deal, the group would sell the 19 floors it currently occupies in the building except those six, it leases to other tenants.
The company would continue to occupy and manage its floors and would have the right to buy back the space at a predetermined price when a 10-year-lease expires, company's spokeswoman Catherine J Mathis said.
However Mathis declined to reveal how much W P Carey would pay for the space, what it would cost to repurchase it or what the rent would be.
Designed by the architect Renzo Piano, the building was completed in 2007.
The Times company previously said that it was pursuing a sale-leaseback arrangement for up to $225 million and would use the proceeds to repay some of the company's long-term debt.
Because we are in continuing discussions, we cannot comment on the status of the sale-leaseback," Mathis said on Thursday.
Guy B Lawrence, a spokesman for W P Carey, declined to comment on the discussions.
The Times Company owns 58 per cent of the 1.5 million square-foot tower. The developer Forest City Ratner owns the rest of the building. Forest City's portion will not be included in the sale.
W P Carey's investors would be guaranteed a specific return for the life of the lease. Executives and brokers who specialise in sale-leasebacks say it is unusual for a transaction to include a buyback provision at a specified price.
The Times company has been seeking various ways to raise money to pay down its debt. One of its two $400 million revolving credit lines will expire in May, but the company has said that it will not seek to renew the full amount, the Times said.
This week, the company said it had reached an agreement for a $250 million loan from the Mexican billionaire Carlos Slim Helu.
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