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New News Corp. Gets $2.6 Billion

Publishing division debt free, assets worth $18 billion

Chairman-CEO Rupert Murdoch is giving his publishing biz a nice send off with $2.6 billion in cash in its coffers and no debt as it prepares for life as a standalone public company.

Investors have been waiting for these figures, which popped up in an SEC filing Friday, as they try to asses the conglom post split.

Chief operating officer Chase Carey confirmed earlier this week that the sundering of News Corp.’s global empire is on track for June and that the new News Corp., the piece splitting off, is planning a road show before then to  discuss its biz in greater detail.

It will house newspapers and information services like The Wall Street Journal and Dow Jones, the New York Post, The Times in the U.K. and News America Marketing; HarperCollins; education group Amplify; in Australia, The Herald Sun paper, Fox Sports, half of Foxtel and the REA Group (digital real estate services) — over $18 billion worth of total assets in all.

Yet publishing is not Wall Street’s all time favorite and there seems to be a management push to recognize the new entity as an Australian multi-media company.

“To some degree, increasingly, there’s a recognition that the company is simply more than the newspaper group. It’s a broad-based Australian multimedia business and books and newspaper business,” Carey said a Deutsche Bank conference in Palm Beach, Fla.

“Both businesses have exciting futures, both should start with strong balance sheets,” he said, referring to the new News Corp. and Fox Group, which will house the entertainment assets after News peels off.

“Newspapers will continue to gravitate from print product to digital product, not that there won’t continue to be print product for a long time,” he said, and the road show will give the market a better understanding of vision, opportunities and plans.

Rupert Murdoch will be chairman. Robert Thomson CEO.

Murdoch will also serve as chairman and CEO of Fox Group, Carey as COO, James Murdoch as Deputy COO.

The company said it will hold a special shareholders meeting to vote on split-related matters at a still unspecified date. Shareholders have to vote in favor of approving and distributing shares of the new company. That’s no real problem when Murdoch controls nearly 40% of the vote and close ally, Saudi Prince Alwaleed bin Talal, another 7%.

The new News Corp. posted $8.6 billion in revenue for the fiscal year ended in June. A massive loss of $2.3 billion came from a $2.9 billion write-down and restructuring charge, mostly at the Australian newspapers. Cash flow was $782 million.

For the six months ended in December, it earned $1.3 billion with $389 million in cash flow on $4.5 billion in revenue.

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