The New York Times Company was desperate for cash back in January 2009 when it sold $250 million of bonds to Mexican billionaire Carlos Slim Helú with an interest rate of 14%. Business is better now, so the Times Co. is paying Slim back early – but he’s not going away.
Like many media companies, the Times Co. has been focused on de-levering as the advertising recession finally bottomed out and both revenues and cash flow improved. The company has already reduced debt from $1.1 billion to about $670 million. The Slim bonds come due in January 2015, but can be called in January 2012 and Times Co. CEO Janet Robinson told the Sunday Telegraph in the UK that the company planned to be ready to do just that. The report then was confirmed by the flagship New York Times itself.
Slim, estimated to be the world’s richest man, will still have a considerable stake in the Times Co. The 2009 deal to sell the quarter billion in debt to two banks owned by Slim, Banco Inbursa and Inmobiliaria Carso also received detachable warrants for an aggregate amount of 15.9 million Class A shares at a strike price of $6.3572, just below the public trading price at the time. The Times Co. closed Monday (9/4) at $7.75.
According to the proxy for the Times Co.’s last shareholders meeting in April, Slim’s Inmobiliaria Carso owned directly 10,050,000 shares of the New York Times Company Class A stock. Added to the warrants, that made him beneficially the owner of just under 26 million shares, or 16.2% of the company’s publicly traded Class A shares. He is far and away the largest shareholder. Nevertheless, the Sulzberger family holds unchallenged voting control via 89.6% of the super-voting Class B shares, or 740,000 shares. They also own about seven million Class A shares.
RBR-TVBR observation: Isn’t it interesting how bullish Mexican billionaires are on the US media business? Both Carlos Slim Helú and Televisa’s Emilio Azcarraga Jean are in the news right now for their large investments in media companies which are, for them, “north of the border.”