Postmedia considers asset sales, restructuring as losses widen
By Alastair Sharp
TORONTO (Reuters) - Postmedia Network Canada Corp PNCa.TO, the country's biggest newspaper publisher, said on Thursday it had initiated a review to consider asset sales and debt and equity restructuring as its losses widened.
The publisher said it lost C$225.1 million ($170.96 million) in the three months to the end of February, including a C$187 million impairment charge, in what Chief Executive Officer Paul Godfrey called "an unrelentingly challenging environment."
That compared with a loss of C$58.2 million a year earlier.
Canadian newsrooms are shrinking in increasing numbers as an oil shock rocks the economy and curtails the appetite of advertisers already distracted by digital outlets. The media retreat is touching small-city newspapers thousands of kilometers apart.
Godfrey and Chief Financial Officer Doug Lamb said on a conference call that a decline in automotive advertising was a particular weight as carmakers move more of their ad spend online to digital outlets such as Google search and Facebook.
Postmedia said it had formed a special committee to consider non-core asset sales, cost reductions, initiatives to boost sales, and refinancing or repayment of debt and the issuance of new debt or equity. The executives declined to offer further details.
Postmedia said it has just under C$650 million of debt outstanding.
The value of Postmedia's bonds has plummeted as investors brace for a restructuring. Its shares have fallen to around 6 Canadian cents a share from about C$2 a share in 2014. Volume of shares trading are typically thin, although there has been a spike in activity this month. Continued...