June 13--Tribune Publishing will carry $350 million of debt when it spins off as a stand-alone company, $25 million higher than previously stated. That figure includes a $275 million cash dividend payable to Tribune Co., which remains the same.
The increased debt load was included in an amendment filed late Thursday with the Securities and Exchange Commission, likely the final update before setting a spinoff date for the publicly-traded publishing company.
Tribune Co. also detailed the latest financial performance and digital progress of its newspapers in the filing. Tribune Co. is expected to spin off the Chicago Tribune, Los Angeles Times and six other daily newspapers, by midyear.
The Chicago-based media company will retain the higher-growth broadcasting and entertainment assets, as well as real estate holdings and valuable equity investments.
Under the revised capital structure, Tribune Publishing will carry $350 million in debt when it spins off, with the bulk of that to cover a $275 million dividend payable to the parent company.
In addition to the $350 million senior term, Tribune Publishing is seeking a revolving credit facility of $140 million, and approximately $50 million in letters of credit, according to Thursday's SEC filing. Beyond the new debt service, additional expenses going forward include about $30 million in annual rent that Tribune Publishing would pay to Tribune Co. to lease space in its buildings through 2017.
The spinoff was announced last summer as a way for Tribune Co. to offload the publishing assets while avoiding the large capital gains taxes it would incur from any outright sale.
The company filed plans with the SEC in December, with the capital structure and executive leadership of Tribune Publishing outlined in subsequent amendments. Time Warner completed the spinoff of Time Inc., its venerable magazine business, last week.
Time Inc., which owns Time, People, Sports Illustrated and other titles, is carrying $1.3 billion in debt, including $600 million used to pay a cash dividend to its parent company. Time Inc. began trading publicly Monday under the symbol TIME.
The stock has fallen 4 percent as of Thursday's close of trading. Tribune Publishing plans to apply to have its common stock listed on the New York Stock Exchange under the symbol TPUB.
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