Sales and investment process started for SaltWire Network and The Halifax Herald

Click to play video: 'Saltwire Network faces insolvency in tough Canadian media industry'
Saltwire Network faces insolvency in tough Canadian media industry
Saltwire Network, Atlantic Canada's largest media group, is filing for creditor protection and is tens of millions of dollars in debt. Heidi Petracek reports on the fears for local news coverage, the Canadian media industry's unprecedented challenges, and how some outlets have been able to thrive, while others struggle – Mar 13, 2024

A Nova Scotia judge approved a process Monday aimed at finding buyers or investors willing to bid on SaltWire Network Inc. and The Halifax Herald Ltd., the two companies that operate Atlantic Canada’s largest newspaper enterprise.

Earlier this month, Nova Scotia Supreme Court Justice John Keith granted the insolvent companies protection from creditors owed about $90 million.

On Monday, Keith approved a so-called sales and investment solicitation process (SISP), which involves canvassing the market for people willing to buy or invest in some or all of the deeply indebted companies’ business operations and assets.

The outcome could include a restructuring or recapitalization of the companies aimed at ensuring they continue as viable businesses, as outlined under the Companies’ Creditors Arrangement Act.

“Public interest is obviously a consideration given the important nature of these businesses, but this SISP offers the opportunity for the renewal of these media companies and … the public service they provide,” Keith told the court when he approved the process.

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The deadline for non-binding letters of interest is April 24. Qualifying binding offers must be submitted by May 24. There’s a June 28 deadline for the judge to approve any deals, with a closing date set for July 31.

Meanwhile, SaltWire and The Herald can continue to operate under CCAA until May 3, at which point they will likely apply for another extension to court-ordered protection from their creditors, which was first granted on March 13.

The media companies employ about 800 independent contractors and 390 employees, which includes about 108 unionized positions.

Meanwhile, Keith confirmed Monday that an affiliated company, Titan Security and Investigation Inc., will be put up for sale through a separate SISP. The profitable security and health-care services company has about 100 full- and part-time employees.

Last week, the judge approved a proposal from SaltWire-Herald’s senior secured creditor, Fiera Private Debt, to loan the companies $1.5 million to keep them operating. Fiera is owed more than $32.7 million, but it has chosen to work on restructuring or selling the businesses instead of forcing them into receivership.

Fiera loaned $500,000 to the companies on March 13 when Keith first granted them protection from creditors.

On another front, former SaltWire president and CEO Mark Lever has said he plans to submit a bid, though it remains unclear what he might bid for. Court documents show SaltWire and its related companies are owned by Lever and his wife Sarah Dennis through separate family trusts that each have a 50-per-cent stake in the businesses.

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That has raised concerns about possible conflicts of interest, which is why Keith has also approved extra powers for the monitor overseeing the CCAA proceedings, KSV Restructuring Inc., and for the chief restructuring officer, David Boyd, who is essentially running the SaltWire-Herald operation.

On Monday, Keith said the changes reflect “concern about conflict and contaminating the process.”

Last fall, the SaltWire companies, with the help of FTI Capital Advisors, encouraged interested bidders to take part in a recapitalization process through an earlier SISP.

“That process has not yet resulted in a transaction, although many parties have expressed, and continue to express, an interest in the opportunity,” KSV Restructuring said in a recent monitor’s report.

“A letter of intent was received recently, and discussions are ongoing with that party.”

 This report by The Canadian Press was first published March 25, 2024.

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