By Barry Walsh
Beleaguered Canadian broadcast group Corus Entertainment has struck another amendment to its current credit agreement with its lenders, which allows for a six-week window with a more favorable debt-to-cash flow ratio.
Under the new amendment, agreed upon with its bank group led by RBC Capital Markets and TD Securities and announced on Tuesday (Sept. 3), the maximum total debt to cash flow ratio – or the ratio by which total debt can exceed annual operating income – required under the financial covenants struck with lenders has been increased to 4.75 through to and including October 15, 2024, with the ability for Corus to request advances under the revolving facility to a certain limit.
The previous amendment held the debt-to-cash flow ratio at 4.25, effective September 1 – a drop from an earlier ratio of 4.5, according to the Canadian Press.
The current amendment also includes requirements to use any excess cash to repay outstanding balances on the debt, as well as terms connected to the use of proceeds on asset disposals and other conditions.
The company’s debts currently stand at more than CDN$1 billion, with material amounts due to be repaid in 2027 and 2028.
Corus Entertainment’s portfolio includes broadcast network Global Television, animation studio Nelvana, assorted radio stations, podcast outfit Curiouscast, and a host of specialty channels. That latter category is undergoing significant change, with the news earlier this summer that rival mediaco Rogers Communications had sealed multi-year licensing deals for branded channels from Warner Bros. Discovery and NBCUniversal – channels such as Food Network, HGTV and Bravo, which used to be under the Corus umbrella. Rogers says it plans to launch the WBD brands on January 1, with Bravo having rolled out earlier this week (September 1).
Shortly after that news broke, Corus Entertainment CEO Doug Murphy was replaced by Troy Reeb, previously EVP of networks and content, and CFO John Gossling as co-CEOs. In July, Corus announced plans to trim close to 800 positions, approximately 25% of its workforce, by the end of its Q4 in August.
Of the most recent amendment to its debt repayment terms, Corus co-CEO and CFO John Gossling said in a statement: “Entering into this amendment is a prudent step as part of a more comprehensive plan we are working through to strengthen our balance sheet and manage liabilities.
“Corus is a critical independent player in the Canadian broadcast industry with a portfolio of valuable assets,” he added. “We continue to take the necessary steps to create and deliver premium content, and engage audiences across Canada.”
This story was originally published on RealScreen.com
