The court-appointed monitor overseeing the potential sale of Atlantic Canada’s largest newspaper chain has confirmed selection of a bidder who has plans to operate SaltWire Network Inc. and The Halifax Herald Ltd. as viable businesses.
In a report dated Wednesday, Toronto-based KSV Restructuring Inc. says talks with the unnamed bidder are advancing towards a transaction that could be completed by Aug. 9, assuming an extension is granted to the sales process.
The Halifax Herald Ltd. owns The Chronicle Herald, the independent Halifax-based daily newspaper that was founded almost 200 years ago.
SaltWire Network Inc. owns other newspapers in Nova Scotia, P.E.I. and Newfoundland, including the Cape Breton Post in Sydney, N.S., the Guardian in Charlottetown and the Telegram in St. John’s, N.L., as well as weekly papers and several digital publications.
They employ about 800 independent contractors and 390 staff, which includes about 100 unionized positions, according to court documents.
On March 13, a Nova Scotia Supreme Court judge granted the two insolvent media companies protection from creditors owed about $90 million, of which $32 million was owed to a senior secured lender, the Fiera Private Debt Fund.
But rather than push the media companies into receivership, Fiera has supported a restructuring process through a series of loans that have allowed SaltWire and The Herald to keep operating under the federal Companies’ Creditors Arrangement Act.
The media companies are owned by Mark Lever and his wife Sarah Dennis. Earlier this year, Lever stepped down as president and CEO of SaltWire, at which point he was expected to submit a bid for the media companies.
In all, four qualified bidders came forward to buy all or part of the media companies’ business and assets, KSV said. None was named.
Last Friday, all but one were told their bids were no longer being considered.
KSV’s report says “discussions are advancing with a party toward a transaction which, if completed, would see the business continue to operate on a going-concern basis. The monitor is hopeful that negotiations will lead to a successful transaction.”
On June 28, KSV is expected to ask Nova Scotia Supreme Court Justice John Keith to extend the media companies’ creditor protection to Aug. 9. The deadline to close any sales transaction was originally set at July 31.
With the help of the monitor, Keith will ultimately decide what deal will ensure the survival of the companies and allow creditors to receive some form of payment for amounts owing.
KSV is also seeking approval for a $135,000 “key employee retention plan” and an increase in interim financing that, if approved, will rise from $3 million to $4.1 million. The employee retention plan is aimed at those helping with the potential sale of the media companies and a related company known as Titan Security and Investigations Inc.
Meanwhile, the report says the media companies recently launched a “last mile” parcel delivery business known as Door Direct, which utilizes their existing carrier network.
“The media companies believe that this business has the potential to materially improve their viability,” the report says. “The Door Direct business is in its development stages.”
As well, the report says plans are moving ahead to sell Titan Security, which is a profitable security and health-care service company with about 100 employees.
This report by The Canadian Press was first published June 20, 2024.
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