Canwest says National Post could close after Friday

Thu Oct 29, 2009 11:58am EDT
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By Wojtek Dabrowski

TORONTO (Reuters) - The National Post, the flagship daily newspaper of Canada's beleaguered Canwest Global Communications, will likely be forced to close after Friday if it isn't transferred to a new holding company, Canwest said in a court filing.

Creditors of the company have indicated they are no longer prepared to fund continuing losses at the Post, which employs 277 people, Canwest said.

The creditor group "will not continue to support funding the National Post Company in the long or short term past October 30, 2009," Canwest said in a court report released on Thursday.

Canwest said the Post has no other sources of funding its "ongoing losses." A failure to transfer the newspaper into a different holding company by October 30 "would likely result in the forced cessation of its operations and commencement of liquidation proceedings in respect of the National Post Company."

Canwest said earlier this week it has reached a deal to move the Post into a new subsidiary of Canwest Publishing Inc, but the move needs court approval. A hearing is set for Friday.

"The National Post Company has been unprofitable since its inception, recording annual losses as high as approximately C$60 million in 2001," Canwest said.

For the year ended August 31, the newspaper is projected to have suffered a net loss of C$9.3 million ($8.7 million).

For the past seven years, the losses at the paper have been funded by a Canwest subsidiary called Canwest Media Inc.   Continued...

<p>Anne Stone Johnson, Vice President of Weber Shandwick, reads the National Post newspaper in her office in Calgary, Alberta, October 6, 2009. REUTERS/Todd Korol</p>