Death Throes

It is interesting to watch this drag on and on.
What is "broader debt restructuring"? Surely they're going to have to sell SOMETHING.


Canwest secures $175M financing, aims for recapitalization deal by July 15

5 days ago

TORONTO — Canwest Global Communications Corp. (TSX:CGS) has lined up $175 million in fresh debt financing and is aiming to have a broader debt restructuring completed by mid-July, the media company says.

The Winnipeg-based broadcaster and newspaper publisher, struggling under $4 billion in debt, said Wednesday that some of its current debtholders have agreed to provide an additional $100 million.

In return, they would receive new senior notes with a face value of $105 million paying a hefty annual interest rate of 12 per cent. That would translate into a yield of 12.6 per cent on the $100 million they actually provide to Canwest.

In addition, CIT Business Credit Canada Inc. will provide a $75-million senior secured revolving asset-based loan facility.

The transactions were expected to close Thursday.

DBRS analyst Chris Diceman described the refinancing as "an interim step to possibly getting a recapitalization completed in the future" but added it's too soon to say whether that will be accomplished by Canwest's target date of July 15.

The new money Canwest gets from its noteholders will be used to retire senior secured debt owed to the company's bankers.

In return, the unsecured debtholders will receive "quite a high return" on the $100 million they provide, Diceman said.

Canwest said Wednesday that the "sufficient credit availability to operate its business in the ordinary course as it continues its work to effect a recapitalization transaction."

The Winnipeg-based TV and newspaper conglomerate said the noteholder committee has extended its forbearance until June 15, by which time an agreement in principle on a long-term recapitalization is to be framed.

A definitive agreement is to be reached on or before July 15.

Diceman said it's too hard to say at this point whether Canwest can meet that timetable, since it all depends on the company's behind-the-scenes negotiations with the noteholder committee - primarily representing large U.S. funds that deal in high-yield debt.

Canwest has failed to pay US$30.4 million in interest that was due March 15 on US$761 million in eight per cent senior subordinated notes.

Canwest has received several extensions from the noteholders while the company worked on selling assets and renegotiating its debt agreements.

"Nobody but those two parties really knows where that is as far as where those discussions are," Diceman said. "But clearly they've laid out some milestones that they must meet. That could be part of the negotiating as well," Diceman said.

Canwest, like many media companies, has been hit by a decline in advertising revenue due to the recession and increased competition for its conventional television stations from specialty cable channels and the Internet.

In addition, it has been burdened with the debt associated with its acquisition of many of the former Hollinger newspapers, including the National Post.

The company's shares closed Wednesday at 39 cents, up four cents, on the Toronto Stock Exchange.