By Sarah Rabil
Jan. 19 (Bloomberg) -- New York Times Co. received $250 million in financing from companies controlled by billionaire Carlos Slim as credit markets dry up and the newspaper industry confronts plummeting ad revenue.
Banco Inbursa SA and Inmobiliaria Carso will issue senior unsecured notes due in 2015 with detachable warrants, New York Times said in a statement today. The publisher plans to use the funds to refinance existing debt, including money borrowed under a revolving credit facility that matures in May.
The loan gives New York Times increased financial flexibility, and the company will continue to work toward reducing debt, Chief Executive Janet Robinson said in the statement. New York Times slashed its dividend last year and is pursuing asset sales to raise cash.
“They need all of the fuel they can get to keep going,” said Richard Dorfman, managing director of the investment firm Richard Alan Inc. in New York. Dorfman, who spoke before the announcement, said he sold the remainder of his stock in New York Times in December.
The company is grappling with an industrywide migration of advertisers and readers to the Internet, coupled with a recession that’s forcing U.S. businesses to reduce marketing. Last week the Minneapolis Star Tribune filed for bankruptcy, joining Tribune Co., which sought protection from creditors on Dec. 8.
New York Times, with a $400 million credit line expiring in May, is trying to raise $225 million from a sale-leaseback of its Manhattan headquarters and last month said it’s open to funding options including revolving debt, public offerings and private placements. The company is also seeking a buyer for its stake in the Boston Red Sox baseball team, according to a person with knowledge of the talks.
Mexico’s Slim, 68, holds 6.9 percent of New York Times Class A shares, making him the third-biggest investor outside of the controlling Ochs-Sulzberger family. At the time of his initial investment, Slim cited the company’s “attractive value.”
New York Times shares closed at $6.41 Jan. 16 on the New York Stock Exchange. The stock has fallen 13 percent this month.
To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net
Last Updated: January 19, 2009 22:35 EST
