Carlos Slim

Carlos Slim has just infused some much-needed capital into the good grey New York Times - given it some "breathing room" as the saying goes.

Slim, the Mexican telecommunications billionaire, is lending the paper $250 million.

He is buying senior unsecured notes. They will be due in 2015 and will carry a 14.053% percent annual interest payment. Payments will be semi-annual.

The Times has the right to prepay the notes beginning in 2012.

Slim isn't an "activist investor." He appears uninterested in shaking up the operations of the company. Indeed, if there is a change of control during the pendency of these loans, it will trigger a “repurchase right” wherein Slim can require full repayment almost immediately. So the deal may be understood as entrenching the present control group.

The notes carry detachable warrants providing the right to buy up to 15.9 million shares of the Times Co.’s Class A stock at a strike price of $6.3572 a share. Slim, who already owns 6.4% of the company, could bring that stake up to 17% by converting these warrants, thereby making himself the third largest shareholder.

Slim doesn't get a board seat.

I don't know what to make of any of this, but I've chronicled the recent history of The New York Times in this blog and I'll continue to do so. I have a feeling that one way or another this transaction may in the fture be seen as a benchmark.