TORONTO (Reuters) - Yet another deadline looms later on Tuesday in talks between Canwest Global Communications Corp and the media company’s lenders and noteholders as it fights to shore up its balance sheet amid a steep drop in advertising.
Canwest, Canada’s biggest media company, has spent recent months in talks with its lenders as well as investors holding its 8 percent notes.
It already owes a $30.4 million interest payment to the noteholders, who now also have the right to demand payment of about $761 million in principal. However, the investors have agreed not to do this while talks continue.
The missed interest payment is just a part of Canwest’s debtload, which stands at close to C$4 billion ($3.45 billion), some of it dating back to its 2000 acquisition of newspapers from former press baron Conrad Black’s Hollinger International.
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, which is 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 debtload has yet to materialize.
Canwest is controlled by the Asper family of Winnipeg, Manitoba. Its shares were up 3 Canadian cents at 39 Canadian cents on the Toronto Stock Exchange on Tuesday morning.
Reporting by Wojtek Dabrowski; editing by Peter Galloway