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New York Times confirms $250m deal with Carlos Slim

The New York Times confirmed last night that it had reached an agreement to take an $250m (£171m) investment from a group of companies controlled by Mexican billionaire Carlos Slim Helú to offset crippling debt.

Banco Inbursa and Inmobiliaria Carso, the companies owned by Slim, will in effect each supply $125m (£89m) in notes due in 2015, with warrants convertible into shares in a private financing arrangement with the beleaguered New York Times Company. The announcement last night confirmed speculation, widely reported yesterday, that the deal was in the offing.

The publisher, which owns the New York Times, the Boston Globe and a host of US local newspapers, said it would use the money to help refinance its existing debt although it will continue to look for other finance options.

In December, the company said it would not replace one of two $400m credit facilities, due to expire in May. It is exploring options to sell its New York headquarters and lease it back.

“The proceeds from this transaction will be used to refinance existing debt, including amounts currently borrowed under a revolving credit facility that matures in May 2009,” said Janet L Robinson, president and chief executive of the New York Times Company.

“We continue to explore other financing initiatives and are focused on reducing our total debt through the cash we generate from our businesses and the decisive steps we have taken to reduce costs, lower capital spending, decrease our dividend and rebalance our portfolio of assets.”

Forbes claims that Slim, who made his money in telecommunications, is the third richest man on the planet with a wealth of $49bn from a portfolio of companies in retail, construction, banking, insurance and a number of other industries.

In September, Slim bought a 6.4% stake in the New York Times Company for $128m (£73m).

Before the deal was announced yesterday, it was suggested that Slim would not gain representation on the NYT publisher’s board or be issued with shares that entitle him to special voting rights like those of the Sulzberger family, which has maintained control of the company for over a hundred years and has about 19% of its shares. However, when the warrants are exercised, Slim will become the largest shareholder in the company.

Source: The Guardian UK by Oliver Luft, 20.01.2009

Filed under: Data Vendor, Mexico, News, , , , ,

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