Billionaire extends New York Times financial lifeline
Mexican billionaire Carlos Slim on Monday agreed to provide the cash-strapped New York Times Company a $250-million loan to stave off mounting debts, the newspaper company said.
Slim will invest $250-million in the form of six-year notes carrying a 14% interest rate, the New York Times reported on its website.
The loan from telecoms tycoon Slim, who already owns 6,9% of the Times Company, comes as the media powerhouse is struggling to meet approaching deadlines to pay back hundreds of millions of dollars in debt.
However, Slim, one of the wealthiest people in the world, will not be represented on the company’s board, the Times said. Control will remain with the ruling Sulzberger family, the newspaper indicated.
“This agreement provides us with increased financial flexibility to continue to execute on our long-term strategy,” Times Company chief executive Janet Robinson said in a statement.
“We continue to explore other financing initiatives and are focused on reducing our total debt through the cash we generate from our businesses and other decisive steps.”
Most immediately, the Times Company needs to refinance a $400-million credit line expiring in May.
The company has put up for sale its stake in the Boston Red Sox baseball team and said last year that it wants to raise up to $225-million by borrowing against its Manhattan skyscraper headquarters.
The US newspaper industry is in freefall due to the recession’s impact on advertising and the defection of both advertisers and readers to the internet.
Advertising revenue for the New York Times Media Group, which also includes the International Herald Tribune, fell 21,2% in November last year compared with the same month in 2007.
The six-year notes in the deal with Slim are with warrants that are convertible into common shares, the company said. The 14% interest rate will have 11% paid in cash and 3% paid in additional bonds.
Slim, whose business interests also cover construction, banking, railroads and mining, is worth $60-billion, according to Forbes magazine.—AFP.