Canwest Global Communications has put its nationwide newspapers up for sale after tipping the Canwest LP publishing division into creditor protection.
The latest restructuring deal with its senior secured lenders comes as Canwest Global was due to repay around $1 billion in debt on Friday to a consortium that includes Canada’s five largest banks.
The broadcaster instead filed for creditor protection for Canwest LP under the Companies’ Creditors Arrangement Act, a move it made back in October for most of its broadcast assets.
‘The company and the LP entities believe that this is the best course of action because it will address the LP entities’ current debt level, preserve jobs and protect newspaper publishing brands that Canadians have come to know and trust over the past 100 years,’ Canwest Global said in a statement.
The move follows six months of crunch talks by Canwest LP and its creditors.
The National Post newspaper is excluded from the latest voluntary court filing with the Ontario Superior Court of Justice, but is included in the print and related online assets now part of a sales process to be conducted by RBC Capital Markets. Newspapers included in the bankruptcy include the Calgary Herald, Edmonton Journal, Montreal Gazette, Ottawa Citizen, Vancouver Sun, The Province, the Times Colonist, Windsor Star, Star Phoenix and Leader Post.
John Douglas, senior VP, public affairs, Canwest Global Communications Corp, told MiC the filing should not affect advertisers and their media campaigns.
‘Canwest’s publishing, broadcasting and digital media businesses have and will continue to deliver industry leading audiences. We will continue to meet our advertisers’ needs as we implement the restructuring plan associated with this filing. Today, our operations continue uninterrupted and on an operational basis, our brands remain strong, dominating their markets. We can and will continue to meet our advertisers every need through this restructuring process with the same talented people and innovative solutions that have always helped them achieve business goals.’
It’s news that Helena Shelton, EVP director trading and accountability, PHD Toronto, was not surprised to hear.
‘Parts of Canwest publishing filing for creditor protection was not a surprise, last October they had the same filing for parts of their broadcast division, ‘ she told MiC. ‘As with the broadcast filing which was business as usual for media agencies, this newest filing will also be business as usual.’
A group of Canadian banks have already placed an unspecified bid on the table to acquire Canwest LP.
‘After due diligence, it was determined there is value in acquiring the whole of Canwest LP’s business, given the operating synergies that can be realized from a national chain of newspapers and online businesses,’ the consortium said in a statement.
Around 48% of the senior secured lenders behind the $1.5 billion in debt owed by Canwest LP have approved the court-directed restructuring.
Canwest Global requires two-thirds support.
The Canadian banks that comprise Canwest LP’s 8% senior noteholders have given the unit $25 million in debtor-in-possession financing to remain afloat through the restructuring.
The 12 dailies, 26 community newspapers and related assets that are part of Canwest LP have been squeezed by an industry-wide advertising slump.
Canwest Global meanwhile continues separate talks with US bondholders to complete a court-directed restructuring of most of its broadcast assets.
From Playback Daily, with files from Media in Canada
