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New York Times Gets Slim - Fast

It didn't take long for the New York Times to strike a deal with Carlos Slim. While the nation was riveted by Barack Obama's inauguration, the New York Times Co. quietly got a $250 million cash infusion from the Mexican telecommunications billionaire.

The deal allows Slim to own about 17% of the company, up from the 6.4% after he paid $127 million in September. But Slim isn't simply a sugar daddy - he's a loan shark, too. While he did not acquire any voting rights on the Times Co. board, he is getting a hefty 14% interest on his investment, with 11% in cash and 3% in additional bonds.

What this deal does is alleviate the Times Co.'s most pressing financial concerns. More than $1 billion in debt, the Times also faces a May deadline on a $400 million credit line. The cash infusion from Slim should allow the company to let the credit line expire without having to replace it. This also gives the Times more time to raise more cash by divesting its interest in the New England Sports Ventures, as well as getting a loan using its Eighth Avenue building as collateral.

The Times was desperate, though. Even spokeswoman Catherine Mathis admits that the interest rate the company agreed to pay is, well, not something she's familiar with:

"I honestly don't know the answer. If you recall, in the early '80s, interest rates soared. This is an appropriate rate given the challenging market conditions."

The market wondered about the deal, too, as investors sent the Times stocks sharply down, dropping 50 cents, or nearly 8%, to $5.91 on the New York Stock Exchange.

Perhaps anticipating the deal and the pending "Slim" times ahead, the Times already started squeezing its staff on expenses. No more $100 bottle wine to go with the lobster dinner, while eating out with a fellow Times staffer. (Yeah, that is now officially frowned upon.)

The New York Observer got its hands on the lengthy memo - no doubt leaked by a disgruntled Times staffer.