NEW YORK - The New York Times Co. will repay a $250 million, high-interest loan from Mexican telecommunications billionaire Carlos Slim earlier than expected, allowing it to cut interest payments.
Companies affiliated with Slim, a shareholder of the Times Co., lent the money at a hefty 14 percent interest rate at the height of the recession in January 2009. It came at a time when credit markets were tight and revenue prospects were bleak because of declines in print advertising.
Since then, the Times Co. has found other sources of cash, including the sale of $225 million in notes late last year at a lower rate of about 6.6 percent. The company also sold most of its midtown Manhattan headquarters for $225 million and is renting back the offices from the new owners. Print advertising revenue remains weak, but the company’s flagship newspaper has begun charging for full access to its website.
“Over the past two years we have significantly strengthened the Times company’s cash position,’’ said Janet L. Robinson, president and chief executive.
The Times Co. said yesterday the loan prepayment will cost $46 million in the third quarter. But the company will save at least $39 million per year in interest over the next three years. The company plans to repay the $250 million in notes due in 2015 on Aug. 15. It previously planned to repay the notes after Jan. 15, 2012, which was already three years ahead of the original schedule. The total payment will be about $279 million including interest.
The company, which owns The Boston Globe, also recently sold more than half of its 17.8 percent stake in the Boston Red Sox for $117 million and said the deal gave it a pretax gain of $64 million. It said earlier this month it will continue to look for a buyer for the remaining shares it owns in Fenway Sports Group, the parent of the Red Sox, the Liverpool Football Club, and other properties.
Forbes lists Slim as the world’s richest man with a fortune estimated at $74 billion.