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View Full Version : Schadenfreude [NYT in big trouble]



megimoo
01-21-2009, 05:49 PM
The New York Times, scrambling to stay in business, has accepted a $250 million investment from Mexican billionaire Carlos Slim Helú: Under the terms of the deal, Mr. Slim, who already owns 6.9 percent of the Times Company, would invest $250 million in the form of six-year notes with warrants that are convertible into common shares, the company said in a statement. The notes also carry a 14 percent interest rate, with 11 percent paid in cash and 3 percent in additional bonds.

A reader who is an expert in corporate finance writes:

.....this is a CLASSIC instance of corporate desperation..."last chance finance"...richly deserved....

Apparently the New York Times Corp. has accepted an offer from Mexican billionaire Carlos Slim to put $250 million into the company. But, man...are the terms onerous!...It's a debenture carrying BOTH a 14% coupon --- junk bond territory ---- AND warrants for 18% of the company, the third largest share...exercisable at a DISCOUNT to Friday's closing price!!...the warrants are in the money NOW!....it gets worse...they cut their dividend in November by 75%...reducing the Sulzbergers' income dramatically...and the new $250 million probably isn't close to enough for their liquidity needs...so they will probably do a $225 million sale/leaseback of the Times office building!...in combination.....this is a CLASSIC instance of corporate desperation..."last chance finance"...richly deserved....

PAUL adds: John should be commended for not calling this post "Slim Pickings." I'm hardly an expert in corporate finance or the newspaper industry. But I know that the Times is a pillar of left-liberalism, so I'm skeptical that it will be permitted to disappear.


http://www.powerlineblog.com/archives/2009/01/022610.php

AHeneen
01-21-2009, 07:43 PM
There's a better AP article here (http://www.google.com/hostednews/ap/article/ALeqM5gNOEJUYjrXi_xoizcMmrdGlV5uRwD95R5ORG1).

patriot45
01-21-2009, 08:04 PM
Turn page 1 for english! :D