New York Times Co. Will Pay Back Slim's $250 Million Loan, With its Sky-High Interest Rate, Three Years Early

The New York Times Co. intends to pay back three years ahead of schedule a $250 million loan from Mexican billionaire Carlos Slim Helu, which carries a credit card-high interest rate, CEO Janet Robinson says.

In an interview with the Sunday Telegraph in London, Robinson said the publishing company had “every intention” of paying back the loan by January 2012, the earliest it can be repaid, which is three years before its January 2015 due date.

The Times Co. borrowed the money from Slim, currently ranked as the world’s richest man, at the bottom of the industry and general economic recession in January 2009. The loan carries an interest rate of 14.053%, costing the paper about $35 million a year in interest payments.

Under terms of the loan, if the Times Co. pays off the debt at the earliest possible date, January 2015, it will have to payback 105% of the principal, or about $263 million.

With the loan, Slim, who has a 6.9% stake in the company, received warrants to buy another 15.9 million shares at a strike price of about $6.35, which if exercised would give him a stake of more than 16%.

The Times – and Slim’s spokespeople – have periodically had to swat down rumors that Slim intends to take a bigger stake in the company, or even to lead a takeover. The Sulzberger-Ochs families control the Times Co. through a separate class of super-voting stock.

The Times, like other newspaper companies recovering from acquisition binges in better times, has assiduously been paying down its debt, reducing its load to $670 million from $1.1 billion at the time it took out the loan.

As it frees up cash, the company intends to go looking for digital acquisitions, even “sizeable” ones, Robinson told the Telegraph. But any big buy, she added, is “a little way off.”