NY TIMES PINCHED BY CARLOS SLIM

New York Times Co. CEO Arthur “Pinch” Sulzberger Jr. yesterday acknowledged that the company is paying a sky-high interest rate to borrow millions from Mexican billionaire Carlos Slim, but argued the economy and newspaper industry left the company little choice.

“Yes, it’s a high rate,” said Sulzberger, referring to the steep 14 percent interest rate Slim is charging for the $250 million he loaned the Times in January, “but given the state of our economy, our industry and the credit markets at the time we did the transaction, we believe it’s fair and financially sound.”

The comments were part of a second memo Sulzberger and Times President Janet Robinson issued to staff as part of their efforts to boost transparency at the struggling newspaper giant.

The memo said that the transaction with Slim included warrants that give Slim the right to purchase 15.9 million Class A shares at $6.36 a share. But it doesn’t look like Slim would have any reason to exercise those options in the current market: The Times’ stock, despite an 8.1 percent jump in price yesterday, closed at $5.46 a share.

In the memo, Sulzberger and Robinson also make reference to the company’s crushing $1 billion debt load, pointing out that just $45 million in debt matures before 2011, “and we expect to pay that in November with cash flow from operations and our revolving credit agreement.”