TORONTO – The country’s largest newspaper chain, currently held by Canwest Global Communications Corp., is up for sale following a bid Friday by senior lenders made up of a consortium of Canadian banks, as well as a court filing for creditor protection.
The bid from five of Canada’s largest banks was made with the approval of the Canwest board to establish a floor price for the chain. RBC Capital Markets has been hired to seek out possible buyers for the newspaper company.
The bid, which went before the courts Friday as part of a larger filing, is for Canwest Limited Partnership, which holds The National Post, 10 major city dailies – Victoria Times Colonist, Vancouver Sun, Vancouver’s The Province, Edmonton Journal, the Calgary Herald, Saskatoon StarPhoenix, Regina Leader-Post, Windsor Star, Ottawa Citizen and Montreal’s The Gazette – as well as 26 community newspapers, and associated online and mobile properties.
The voluntary filing and protection under the Companies’ Creditors Arrangement Act (CCAA) will allow the publishing group, known as LP, to operate as usual but provide debt relief while it continues to work on a recapitalization plan.
The National Post, which was recently transferred from the media conglomerate’s holding company Canwest Media Inc. (CMI) to a new subsidiary of the publishing group, remains outside of the CCAA filing but part of the bank bid.
The LP – which has about $1 billion in annual revenue – holds about $1.5 billion in debt, much of that from the buyback of a 25 per cent stake in 2007 for just under half a billion dollars.
Under the protection, LP has received $25 million in debtor-in-possession, or DIP, financing to carry the affected business units through the restructuring process. The "pre-packaged" plan has the approval of 48 per cent of LP’s eight per cent senior noteholders.
Negotiating a restructuring plan with its creditors in advance of the filing tends to shorten the length of time the company is in creditor protection. It also increases the likelihood of court approval.
Meanwhile, CMI, which holds Global Television and some specialty channels such as TVtropolis, Mystery TV and Men TV, has been under creditor protection since Oct. 6 as it too continues to pursue a recapitalization with its own set of senior lenders and debtholders. The filing did not affect Canwest’s stable of specialty channels acquired from Alliance Atlantis Communications Inc.
© Copyright (c) Canwest News Service
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