New York Times Co. has received $250 million in financing from companies controlled by Mexican billionaire Carlos Slim as the newspaper industry confronts plummeting advertising revenue and tighter credit markets.
In return, Banco Inbursa SA and Inmobiliaria Carso will get senior unsecured notes due in 2015 with detachable warrants, New York Times said in a statement.
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 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 industry wide migration of advertisers and readers to the Internet, coupled with a recession that's forcing US businesses to reduce marketing spend.
Last week, the Minneapolis Star Tribune filed for bankruptcy, joining Tribune Co, which sought protection from creditors on December 8th.
Bloomberg