(18 March 2009 8:15 pm)

MUMBAI: Time Warner Inc. (TW) has spun off Time Warner Cable, a reorganisation process which resulted in the loss of 1,250 jobs last month.

The company has disposed of 300.3 million shares and paid a cash dividend of $10.27 per share. This resulted in parent Time Warner receiving $9.25 billion.

Investors from Time Warner have a floating debt of $8.3 billion and fear that they might be asked to pay a high interest rate.

A total of $2.5 billion is said to be paid off, with the funds available after capital spending or the free cash flow with the company. The company is also likely to convert $3.5 billion of debt to long-term bonds. TWC also put into effect a 1-for-3 reverse stock split.

"The company is spinning off its cable business because, it no longer needs in-house distribution for its channels like CNN, HBO and others," says Time Warner CEO Jeffery Bewkes.

Last week, Time Warner Cable stock was priced at $25.90 per share, up by 91 cents, while parent company Time Warner's shares increased to 8 cents, touching $8.40 per share.

Also Read:

Time Warner firms form new media alliance with Adobe

Time Warner Cable promotes Glenn Britt as chairman