Wednesday, January 21, 2009

The Mexico City Times???

The cash-hemorrhaging New York Times has AGAIN taken a cash infusion from Mexican Billionaire Carlos Slim Helu (pictured above), the son of Lebanese-born Catholic immigrants to Mexico and one of the richest men in the world today.

Currently the NY Times has a staggering $1.1 BILLION in debt, which has proven to be difficult for the Sulzberger’s to pay off.

This past September acquired a 6.9% stake in the NY Times through several stock purchases. But since that time, the NY Times fiscal situation has worsened and now Calos Slim has stepped forward with another investment of $250 million, allowing the NY Times to meet a $400 million interest payment due in May.

As part of the agreement, Slim will pay a series of notes over six years, totaling $250 million, with warrants that convert to stock. The interest on the NY Times debt is a whopping 14%, of which 11% is cash, with the remaining 3% in the form of additional bonds.

At this point it remains unclear what Slim’s intentions are with the company. As one report noted, “When he bought his stake in September, Slim made clear that he wasn’t interested in influencing the company’s direction. Whether he holds true to that now is an open question.”

Times shares closed this past Friday at $6.41. Should it drop below $5/share, it will be relegated to virtual “penny stock” status, as mutual funds and pension funds are generally barred from buying stocks valued below $5/share.

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