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.