- The Washington Times - Tuesday, January 20, 2009

NEW YORK (AP) | The New York Times Co., which has been struggling with declining advertising sales and is facing deadlines to repay hundreds of millions in debt, is getting a $250 million infusion from Mexican telecommunications billionaire Carlos Slim.

The Times is paying a hefty price for the investment — an interest rate of 14 percent for the six-year notes — and is giving Mr. Slim warrants that he could use to boost his stake in the company to 17 percent from 6.9 percent.

That would make Mr. Slim, one of the world’s richest men, one of the newspaper publisher’s biggest shareholders.

Mr. Slim would get no representation on the Times’ board and no special voting rights in return for his investment.

The Ochs-Sulzberger family owns about a 19 percent equity stake in the company and controls it through a special class of supervoting shares.

Another large shareholder, the hedge fund Harbinger Capital Partners, holds a 19.9 percent stake in the company.

The New York Times shares slipped 50 cents to close at $5.91 Tuesday, the first trading day after the company announced the deal.

The financing deal is with Mr. Slim’s companies Banco Inbursa and Inmobiliaria Carso for $125 million each. In September, Mr. Slim and his family bought 6.4 percent of the Times Co.’s publicly traded shares, that has since risen to about 6.9 percent.

Times President Janet L. Robinson said Monday that the company will use the cash infusion to refinance existing debt. The company’s debt stands at about $1.1 billion, with a $400 million loan expiring in May.

The Times, which publishes the Boston Globe and International Herald Tribune in addition to its flagship newspaper, has been trying to conserve cash as advertising revenues continue to slide and as the global recession exacerbates what has already been a dismal time for the newspaper industry.

In November, it slashed its quarterly dividend by 74 percent - a move expected to save $98 million a year but also cut the income of the company’s Ochs-Sulzberger family.

It also plans to raise $225 million from its new, 52-story Manhattan headquarters, either by selling the building and leasing it back or borrowing against it. In addition, it has put its stake in the Boston Red Sox baseball team up for sale.


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