Mexican Billionaire Invests in The New York Times Company (original) (raw)
Media|Mexican Billionaire Invests in Times Company
https://www.nytimes.com/2009/01/20/business/media/20times.html
Advertisement
- Jan. 19, 2009
The New York Times Company said Monday it had reached an agreement with the Mexican billionaire Carlos Slim Helú for a $250 million loan intended to help the newspaper company finance its businesses.
Under the terms of the deal, Mr. Slim, who already owns 6.9 percent of the Times Company, would invest $250 million in the form of six-year notes with warrants that are convertible into common shares, the company said in a statement. The notes also carry a 14 percent interest rate, with 11 percent paid in cash and 3 percent in additional bonds.
The deal comes as the Times Company looks to raise money amid flagging advertising sales and approaching deadlines to pay back $1.1 billion in debt in the next few years.
The company will use the proceeds from the transaction to refinance its existing debt. One of its two 400millionrevolvingcreditlinesissettoexpireinMay.The400 million revolving credit lines is set to expire in May. The 400millionrevolvingcreditlinesissettoexpireinMay.The250 million investment should help free some of the company’s borrowing capacity.
“This agreement provides us with increased financial flexibility to continue to execute on our long-term strategy,” Janet L. Robinson, chief executive of the Times Company, 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.”
The company has also put its stake in the Boston Red Sox up for sale and said last year that it would borrow as much as $225 million against its new headquarters in Manhattan through a sale-leaseback agreement.
Mr. Slim will receive no representation on the company’s board or any shares with special voting rights like those of the Sulzberger family, which controls the company. Nonetheless, when Mr. Slim exercises the warrants, he will be among the largest single shareholders in the Times Company, owning up to 17 percent of the common shares outstanding.
The Sulzberger family members own about 19 percent of company and control it with a special class of voting shares.
Mr. Slim, one of the wealthiest people in the world, controls phone companies and has major investments in retailing, construction, banking, insurance, railroads and mining. In March, Forbes magazine estimated his fortune at $60 billion.
Mr. Slim first approached the Times Company in November, people briefed on the discussions said.
Advertisement