Canwest seeks extension of debt

Posted by Simon Day on March 12, 2009 at 8:28 AM

The media branch of Canwest Global Communication Corp. and its senior lenders have agreed to an extension of a waiver on the conditions of a loan until April 7, Reuters reported. This will allow continued operation of Canada's largest media company, which owns the Global television network and a chain of daily newspapers in Canada, while it attempts to secure capital through cutting operating and capital costs.

Canwest announced on Wednesday that it would forego the interest payment of US$30.4 million due on March 15. However, it was quick to note that under the terms of the agreement, if the interest is paid before April 14, its creditors may not demand payment of the US$761 million loan.

Current negotiations surround access to the company's C$112 million credit facility until at least April 7, as the company attempts to source capital. Already in February, Canwest's banks had more than halved the main credit facility from C$300 million to C$112 million.

In an attempt to raise cash the company has sold its U.S. magazine The New Republic, is considering selling five of its TV stations and has reached an agreement on the sale of its stake in the sports broadcasting service, Score Media.

The main source of Canwest's debt stems from the purchase of a group of Canadian newspapers from Hollinger international in 2000 for C$3.2 billion. The purchase saw Canwest as the country's largest daily newspaper publisher with 13 big city daily papers and 126 local newspapers.