With one of two credit lines about to expire, The New York Times was rescued by a white knight – well, maybe – in the shape of Mexican billionaire Carlos Slim.
The company confirmed on Monday that Slim, whose assets total some $60 billion, would invest $250 million in the form of six-year promissory notes. The investment gives the paper vital breathing room in a dismal advertising market, and as print readership declines across the nation.
One of the company’s two $400 million credit lines expires in May.
Two newspaper companies, The Tribune Company and The Minneapolis Star-Tribune, have declared bankruptcy in recent weeks, due to the ongoing credit crunch and decline in ad sales.
But it comes at a hefty price. Slim will get 14 percent interest on his notes, with 11 percent paid in cash and 3 percent in additional bonds. When Slim exercises his warrants at the end of six years, he will own up to 17 percent of the company’s common shares.
The Sulzberger family members own only about 19 percent of the company, but they control it with a special class of voting shares.