Canwest secures new financing; deadlines still loom

TORONTO (Reuters) - Canwest Global Communications CGS.TO, Canada's biggest media company, has secured a C$175 million ($153.5 million) financing lifeline as it fights to restructure its mounting debt load while contending with a sharp downturn in the advertising market.

CanWest Global Communications Corp.'s President and CEO Leonard Asper arrives for the Canwest Media works annual general meeting in Toronto January 11, 2007. REUTERS/J.P. Moczulski

Canwest said on Wednesday it found buyers for C$100 million of 12 percent senior secured notes that its key subsidiary will issue, and CIT Business Credit Canada Inc has agreed to provide a C$75 million asset-based loan.

The Winnipeg, Manitoba-based company said existing senior lenders have agreed to defer payments of about C$10 million until June 2 so the new notes and loan can be arranged.

Canwest said it now has until June 15 to reach a deal with existing noteholders on a recapitalization transaction.

Canwest’s overall debt stands at close to C$4 billion, some of it dating back to its 2000 acquisition of newspapers from former press baron Conrad Black’s Hollinger International.

The company already owes a $30.4 million interest payment to existing noteholders, who have the right to demand payment of about $761 million in principal. The noteholders have agreed to refrain from doing so while talks continue.

Deadlines in the creditor talks have been set before, only to be extended repeatedly. Analysts have said Canwest could file for bankruptcy protection, but the company has not involved the courts thus far.

Meanwhile, the recession continues to severely depress the advertising market, the lifeblood of Canwest’s stable of newspapers and TV stations. It has also dampened the appetite of potential buyers of Canwest assets.

Canwest owns Canada’s Global television network and a chain of daily newspapers anchored by the National Post. It also has television operations in Australia through its stake in Network Ten.

It has pledged to shed noncore assets and has announced a string of small deals, including the sale of its stake in sports broadcaster Score Media, as well as the U.S.-based New Republic magazine.

Last week, it said it would sell its indirect interest in four Turkish radio stations. However, a large-scale deal that could make a big dent in its debt load has yet to materialize.

Shares of Canwest, controlled by the Asper family of Winnipeg, were up 6 Canadian cents at 41 Canadian cents on the Toronto Stock Exchange on Wednesday morning.

($1=$1.14 Canadian)

Reporting by Wojtek Dabrowski; editing by Frank McGurty