Canwest lenders extend debt-repayment deadline to March 11
Last Updated: Friday, February 27, 2009 | 7:35 PM ET
The Canadian Press
Canwest Global Communications Corp. says its lenders have agreed to extend a Friday debt -repayment deadline by 12 days but reduced the media company's $300-million credit line by nearly two-thirds.
The Winnipeg-based company, which has been under growing financial pressures, said late Friday senior bankers agreed to extend the waiver of some borrowing conditions on its Canwest Media unit until March 11 and permanently cut its credit line to $112 million.
Currently, Canwest has $92 million drawn under the credit line but said it has enough cash on hand, along with current cash flow projections, to operate normally through the period.
The company and its bankers will continue talks on extending the debt-repayment deadline beyond March 11, Canwest said.
"Canwest continues to take proactive steps to reduce its operating and capital costs, restructure its operations and improve efficiencies," Canwest said. "It is also reviewing its strategic alternatives and continues to actively pursue opportunities to divest of non-core operations and assets and collect other amounts that it is owed."
'Business as usual'
Leading into the original Friday deadline, a spokeswoman for Canwest Global Communications said it was "business as usual" at the media company.
Company representative Phyllise Gelfand, however, said, "It's business as usual. I'm in the same building, and they [Post employees] look busy putting the paper together."
She declined to comment on whether Canwest was making any changes to its operations.
Employees at Canwest and its flagship National Post daily newspaper in Toronto have expressed private concerns that the publication could be forced to close as the parent company deals with its debt troubles.
Canwest stock rose 4.4 per cent on the TSX on Friday. Canwest stock rose 1.5 cents to close at 35.5 cents, a gain of 4.4 per cent, on the Toronto Stock Exchange in Friday trading of more than 919,000 shares.
The DBRS rating agency had said that if Canwest fails to renegotiate or repay about $100 million it owes, the company would be in default.
DBRS has also placed Canwest under further review on concern it is not currently in compliance with bank covenants regarding a $300-million credit line.
Trying to sell assets
Canwest has been struggling to sell several of its non-core assets in an attempt to pay off its debts, incurred as a result of major acquisitions of the former Southam newspaper chain in 2000 and the Alliance Atlantis entertainment company in 2007.
Earlier this month, Canwest placed its five E! network conventional television stations on the block, though none has yet sold.
On Wednesday, Canwest announced it's selling part of its stake in sports broadcaster The Score for $6.62 million.
