The Financial Times reports:
Carlos Slim Helu, the second richest man in the world, threw a $250m lifeline to the New York Times on late Monday evening, but extracted a steep interest rate for easing the group’s impending financing pressures.
The financing comes in the form of senior unsecured notes with detachable warrants. The debt notes, repayable in 2015, have a coupon of 14.053 per cent, of which the company may pay 3 per cent in kind. The publisher said it would use the proceeds to refinance a $400m debt facility due in May.
Entities owned by Mr Slim also received warrants totalling 15.9m class A shares at a strike price of $6.357. If he exercises his warrants before they expire in January 2015, he will become one of the top shareholders of the New York Times with close to a 20 per cent stake, but without the votes to challenge the controlling Sulzberger family.
Mr Slim, whose wealth is estimated at $60bn by Forbes, is a Mexican telecommunications tycoon who made his fortune from ownership of Telefonos de Mexico and America Movil.
Slim gets a 20% stake, high interest rates, but no votes? This sounds like more financial wizardry. I want to read about the New York Times’ plan to maintain high-quality journalism. I’m tired of hearing about empty media monetization schemes that relate more to propping up existing structures than improving the quality of the information.