TIME INC SEEKS BREATHING ROOM

Publisher aims to extend maturity of revolving credit facility and sell unsecured notes

TIME Inc, publisher of the iconic magazine that first hit the stands in 1923, is looking to ease a billion-dollar debt load that’s hobbling efforts to get ready for its next century.

The company aims to extend the maturity of a revolving credit facility and a term loan, each by three-and-a-half years, it said in a regulatory filing Friday. It’s also trying to cut the credit facility to US$300 million (RM1.26 billion) from US$500 million, according to the filing. Time said it planned to sell up to US$300 million in senior unsecured notes due in 2025 to repay US$200 million of the term loan and other obligations. Time reported US$1.2 billion in long-term outstanding debt as of June 30.

Weakness in print and other advertising revenue has plagued Time as the medium has lost readers to online and other competition. The magazine owner said in April it was sticking with its web strategy rather than selling itself.

“We have a real opportunity to be aggressive in reengineering the cost structure of the company,” said chief executive officer Rich Battista at the time, adding that he was committed to retaining stalwart brands including Time, Fortune and Sports Illustrated. The company is also exploring a sale of smaller publications to concentrate on larger titles, he said in July.

Once part of Time Warner Inc, Time was spun out as a separate unit in 2014, a move that skyrocketed debt to US$1.37 billion from US$38 million and worried investors that a focus on magazines could hinder growth.

Those fears are still alive, as consensus estimates point to another two years of declining adjusted earnings.

Time cut 381 jobs in June, marking the start of an 18-month transformation strategy that should yield annualised savings of US$400 million, it said in a June 30 filing.

Moody’s Investors Service on Friday said it expected Time’s plan to “reverse the negative trends for the company”.

S&P Global Ratings, which recently cut Time’s credit rating , said that it expected the company to maintain enough liquidity to fund its transformation and investment needs. S&P rates Time’s new bonds at B, five steps into junk, while Moody’s rates them at an equivalent B2.