Canwest to recapitalize under protection plan
By Wojtek Dabrowski
TORONTO (Reuters) - Canwest Global Communications Corp, Canada's biggest media company, announced a long awaited recapitalization plan on Tuesday that will see parts of the company file for bankruptcy protection.
The plan is the result of months of negotiations with debtholders and is supported by a majority of its senior subordinated noteholders. It will allow Canwest's operations to emerge as a stronger entity, the company said.
Canwest, which is controlled by the Asper family of Winnipeg, Manitoba, owns Canada's Global television network and a chain of daily newspapers anchored by the National Post.
The Post and the Global TV network are among the Canwest properties that are filing for creditor protection, the company said.
The shoring up of Canwest's finances comes amid speculation that the company could sell its entire stable of newspapers, either to competitors or to private-equity investors. The plan announced on Tuesday may push the company to sell off such core assets.
Canwest, which has about 7,400 employees, has been creaking under a debtload of about $4 billion.
And like media companies elsewhere, Canwest has been hard hit as the recession choked off advertising revenues. It has also prompted the company to slash costs, with 560 layoffs announced in November 2008.
"The abrupt and unprecedented decline in advertising revenues reduced operating profits by levels no one could've predicted," Canwest Chief Executive Leonard Asper said in a video message posted on the company's website on Tuesday. "In this environment, Canwest simply had too much debt." Continued...