Canwest seeks bankruptcy protection for broadcasting assets and National Post

Canwest Global Communications Corp. has filed for court protection from bankruptcy for  many of its broadcasting assets as well as the National Post newspaper.

In a news release issued today, Canwest announced that the corporation obtained an order from the Ontario Court of Justice to begin proceedings under the Companies' Creditors Arrangement Act.

“Throughout this process, all our operations will continue uninterrupted,’’ Canwest president and CEO Leonard Asper said in the news release  “We are firmly committed to moving quickly to restructure the company and emerge from creditor protection financially stronger and more competitive.”

FTI Consulting Canada Inc., is the court-appointed monitor and will also assist in a restructuring plan. The Canwest board has retained Hap S. Stephen as chief restructuring officer.

The court order applies to Canwest Media Inc. and  Canwest  Television Limited Partnership (including Global Television, MovieTime, DejaView, and Fox Sports World).  

Canwest reported that these entities will continue operating during a recapitalization process.

A proposed recapitalization has been supported by members of an ad hoc committee of Canwest Media Inc. creditors. They represent more than 70 percent of the eight-percent subordinated notes issued by the company.

"The Company believes that entering into this agreement and implementing a Court supervised and consensual recapitalization plan represents the best alternative for the long-term interests of the CMI Entitites, its approximately 1,700 employees, suppliers, customers, and other stakeholders," Canwest stated.

The court order does not apply to a separate subsidiary, Canwest Publishing. It  owns most of the corporation's newspapers, including the Vancouver Sun, Province, Victoria Times-Colonist,  Vancouver Courier, North Shore News, Now papers, Delta Optimist, and other papers in B.C. and other provinces.

In July, Canwest's financial statements reported a $3.7-billion debt. The Canwest Media Inc. entities, which went into bankruptcy protection today, owed $761 million to holders of eight-percent senior subordinated notes.

Canwest Publishing, which has not sought bankruptcy protection, owed $874.2 million to its senior secured credit facility as of May 31, 2009. In addition, Canwest Publishing owed $74.2 million to a senior subordinated unsecured credit facility and another $428 million in senior subordinated unsecured notes.

Related article: With Canwest foundering, Dennis Skulsky might prefer running the B.C. Lions

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2 Comments

Salty

Oct 6, 2009 at 11:20am

Charlie, now that the filing has occurred, how do you think the scenario will unfold where Canwest newspapers are concerned? Purportedly, the LP division isn’t affected by today’s move. But the writing is on the wall.

Ross H.

Oct 7, 2009 at 1:43pm

Salty, the bankruptcy didn't apply to Canwest LP (newspapers). They are in separate discussions with their creditors. But expect them to file for protection in the next couple of weeks.

Canwest's B.C. community newspapers will likely be split up between Black Press and Glacier. There will be casualties; money makers will live and money losers will be closed. Black already has newspapers in all the burbs on the lower mainland, so why keep open a competitor after buying It? Canwest's Now Group, for instance, will become the Then group. Both Black and Glacier run lean outfits, so some employees will be absorbed while the rest are trimmed.

The Vancouver Sun is often mentioned in what-will-happen-next scenarios as a paper on the auction block. The Province is not. The Times Colonist in Victoria is best of the Island's bad lot and it has its own press, so it will fetch a sum. Little outposts, like those in Parksville and Ucluelet, are likely toast. They may be packaged with other papers when sold, but how long they last afterward will depend on how much money they can make.