Media giant Canwest to seek court protection, Aspers to invest $15 million

The Canadian Press ~ The News
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The company that owns Global Television and the National Post newspaper said Tuesday it is filing for creditor protection in a deal with a key group of lenders, as it seeks court approval to restructure a mountain of debt.
Canwest Global Communications Corp. (TSX:CGS) has been struggling for months to deal with the debt load, which the Winnipeg-based broadcaster took on when it bought the former Southam newspapers and the National Post earlier this decade.
Business units that will be filing for creditor protection include the Canwest Television Limited Partnership, which holds Global Television, MovieTime, DejaView and Fox Sports World, and The National Post Company.
After the restructuring, Canwest creditors would receive shares of the media company. Canwest's current shareholders would own just 2.3 per cent of the shares of the new Canwest. Canwest's current shares are under review by the Toronto Stock Exchange for possible delisting, a move that is expected when publicly traded companies file for creditor protection.
Leonard Asper and other members of Canwest's founding family have agreed to invest up to $15 million in the restructured company. Canwest didn't say how much voting control or operational involvement the Aspers would have after the restructuring. The family has controlled Canwest through a special class of multiple-vote shares.
Leonard Asper said in a statement that the company believes the restructuring can be implemented in four to six months while Canwest continues to operate under the .
"This pre-packaged financial restructuring is intended to minimize business disruption and preserve the value of these business operations," Asper said.
"Because it has the support of the Ad Hoc Committee (of creditors), we believe that we can use the stability offered by the CCAA to implement this plan in four to six months, which will renew the financial prospects of our operations and put Canwest on a stronger footing for the future."
The filing does not include specialty channels Canwest bought from Alliance Atlantis in 2007, nor does it include the subsidiary that owns other newspapers, among which are the Montreal Gazette, the Calgary Herald, the Edmonton Journal and the Vancouver Sun and Province, or the company's online operations including the Canada.com Web portal.
Canwest has been selling pieces of its business in recent weeks to show lenders that it's making progress on reworking its operations.
Most recently it sold off its majority stake in Australian broadcaster Ten Network Holdings, in addition to past sales of its E!-branded TV stations and U.S. political magazine The New Republic.
The so-called Ad Hoc Committee was formed by an influential group of creditors that own a specific part of Canwest's overall debt.
Canwest says the committee represents more than 70 per cent of the eight per cent senior notes issued by Canwest Media Inc., one of Canwest's main subsidiaries.
Under CCAA, any restructuring has to be approved by all classes of creditors and by the court that's overseeing the case.
In the meantime, the Canwest operations affected by the filing are expected to continue uninterrupted.

Organizations: Canwest, National Post Company, Global Television TSX Southam Toronto Stock Exchange Alliance Atlantis Montreal Gazette Calgary Herald Edmonton Journal Ten Network Holdings

Geographic location: U.S., New Republic

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