Mexican Billionaire Bails Out the Gray Lady

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.

Written by Drea Knufken

Drea Knufken

Currently, I create and execute content- and PR strategies for clients, including thought leadership and messaging. I also ghostwrite and produce press releases, white papers, case studies and other collateral.