Canada's Postmedia reaches debt restructuring deal, posts loss
By Alastair Sharp
TORONTO (Reuters) - Postmedia Network Canada Corp PNCa.TO, the country's biggest newspaper publisher, will give creditors nearly all of its equity in a restructuring deal that would almost halve its heavy debt load, the company said on Thursday.
The deal will reduce its debt by C$307 million ($236 million) and cut around C$50 million from its annual cash interest payments, the company said.
"The outcome we announced today represents the best way forward for Postmedia," said company Chairman Rod Phillips, who headed the special committee that oversaw the process.
Postmedia launched a strategic review in April, looking to sell assets and restructure its heavy debt load as it struggles with falling print advertising revenue.
It owns the National Post, Montreal Gazette, Calgary Herald, Ottawa Citizen and Sun tabloids in Toronto, Calgary, Edmonton, Ottawa and Winnipeg.
The company said it had reduced its first-lien obligations to C$225 million and extended them by around four years to July 2021. It exchanged second-lien notes for 98 percent of existing equity, meaning shareholders' total stake will be reduced to 2 percent.
Postmedia also secured C$110 million of new second-lien debt priced in U.S. dollars, due in mid-2023, that offers no cash interest for three years.
It expects to complete the transaction by September. Continued...