9:54 a.m. | Updated The New York Times Company said Wednesday that it would pay back the $250 million loan from Carlos Slim Helú, a Mexican telecommunications billionaire, on Aug. 15, freeing itself from one of its larger financial obligations.
Peter Foley/Bloomberg NewsThe New York Times Company will settle its debt with Carlos Slim Helú on Aug. 15.
The repayment will come three and a half years before the loan is due and five months sooner than the company initially planned to settle the debt.
Janet L. Robinson, chief executive of the Times Company, and Arthur Sulzberger Jr., chairman and publisher of The New York Times, said in a message to employees that the company’s strengthened financial position enabled the early payback.
“Our ability to pay down this debt at this time is directly linked to the decisive steps we have taken to improve our financial flexibility over the past two years,” they wrote. “We remain focused as we move to the next phases of our business plans and as the uncertain global economy and the ongoing volatility in our industry continue. But today we take pride in this moment.”
The Times Company ended the first quarter with $352 million in cash and short-term investments on hand. The total cost of the loan, with a 14 percent interest rate, was approximately $279 million.
While the company will incur a $46 million loss on the prepayment in the third quarter, savings on interest over the next three and a half years will exceed $39 million each year.
Mr. Helú and members of his family hold about 7 percent of the Class A shares in the Times Company.
The Times Company has taken other steps recently to firm up its financial position, including a deal last month to sell most of its stake in the Fenway Sports Group, owners of the Boston Red Sox. It sold 390 of its 700 Class B units of the Fenway Sports Group to three separate buyers in a deal for $117 million. It now holds a 7 percent stake in the company.
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