A key part of the Canwest Global Communications Corp. media empire has been granted court protection from creditors.

The National Post newspaper and Global Television are included in the court filing by holding company Canwest Media Inc., the Winnipeg-based parent firm said Tuesday.

Canwest has come to an agreement with its creditors that will see some of its business units enter bankruptcy protection. (Nathan Denette/Canadian Press)

Canwest also announced progress in its plan to repay its $3.9-billion debt. Specifically, the plan involves holders of the Canwest Media's short-term debt, 70 per cent of whom have agreed to turn their debt into shares.

Global Television, MovieTime, DejaView, Fox Sports World and the company that operates the National Post are among the units included in the filing.

Federal legislation governing financially troubled companies allows them to continue their operations while allowing creditors to receive some form of payment for amounts owing to them.

Under the rules, lenders can't seize assets as long as the legally insolvent company is working to reorganize its assets after it has obtained bankruptcy-court protection under the Companies' Creditors Arrangement Act.

Canwest Limited Partnership, the business division that holds most of Canwest's daily newspaper holdings — including the Montreal Gazette, Ottawa Citizen, Vancouver Province and Calgary Herald — has not filed for creditor protection.

But the Canwest LP newspaper unit, whose latest extension to pay interest owed to creditors is set to expire on Oct. 31, 2009, could still make a separate creditor protection filing of its own before or after that date.

CEO Leonard Asper sought to reassure employees of the companies included in the filing.

"It is creditor protection, which other companies such as Cadillac Fairview, Air Canada and Stelco have successfully used to obtain the breathing room to reorganize their debt," he said in a statement. "In each case they've emerged stronger companies."

"Most importantly in all of this is that for you, your salary, benefits and pension remain the same, your reporting and the management of your operation also remains the same. We have worked to ensure that our financial restructuring plan minimizes — to the extent possible — the disruption to you and the operations."

But Carmi Levy, an independent technology analyst based in London, Ont., said he expects layoffs of staff and sales of the company's major assets will be next. Levy said the days of Canwest as a media giant appear to be over.

"The company that expanded significantly for much of the past decade into a print and broadcast media conglomerate that stretched from coast to coast to coast will be no more. Those days are gone," he told CBC News. He said the company simply could not pay back its loans with dwindling advertising revenues.

Asper said it will take four to six months to complete the reorganization.

The Toronto Stock Exchange suspended trading in Canwest Global shares and announced it was reviewing whether the company should be de-listed.

Last week, reports claimed Paul Godfrey, the CEO of the National Post, had lined up investment bankers to buy some or all of the company's newspaper assets. Canwest officially denied that the papers were for sale at the time, but the fact they have been excluded from Tuesday's CCAA filing could facilitate a sale down the road.

The plan "represents the best alternative for the long-term interests of the [company], its approximately 1,700 employees, suppliers, customers and other stakeholders," Canwest said in a release.

Global Television is included in the application for court protection. (CBC)

The business units seeking bankruptcy protection represent about 30 per cent of Canwest's annual revenue last year.

Following the sale last month of Canwest's Network Ten television property in Australia, the business units seeking creditor protection have about $65 million of cash on hand.

They have also secured an additional $100 million in debtor-in-possession financing to allow the units to meet obligations to employees and suppliers of goods and services provided after the filing date.

No layoffs, Canwest says

After the restructuring, Canwest creditors would receive shares of the restructured media company. On top of that, at least $65 million worth of new Canwest stock would be issued. Canwest's current shareholders would own just 2.3 per cent of the new Canwest.

The company's operations will continue uninterrupted during the recapitalization process, the company said.

No layoffs and no asset sales are planned, a Canwest spokesman told CBC News.

“This is not bankruptcy," Canwest vice-president John Douglas said. "Bankruptcy is liquidation and that is not at all what this is. This is what they call a strategic filing.”

But some creditors and suppliers may be financially hurt by the restructuring, he acknowledged.

Under the restructuring, Canwest CEO Leonard Asper will put $15 million into the new company. (Adrian Wyld/Canadian Press)

Asper and other members of Canwest's founding family have agreed to invest up to $15 million in the restructured company.

It is not yet known how much voting control or operational involvement the Aspers would have after the restructuring.

The company expects the recapitalization process to last between four and six months.

Canwest has struggled for several years to get its huge debt load under control. The bulk of it was accrued when the company bought the former Southam newspaper chain in 2003.

With files from The Canadian Press