Canada

Canwest expected to get another reprieve

Canwest Global Communications is expected to get another reprieve this week as it faces a late-Wednesday deadline for renegotiating borrowing conditions on its debt.

Canwest Global Communications is expected to get another reprieve this week as it faces a late-Wednesday deadline for renegotiating borrowing conditions on its debt.

It also has an estimated $38 million in repayments due Friday.

The national broadcaster has been shopping around some of its assets and making agreements to sell certain divisions, and that could give the lenders confidence that progress is being made, said Chris Diceman, senior vice-president of debt rating service DBRS.

"Our general expectation at this stage [is] that they will be extended probably for another short period of time," said Diceman. 

Canwest was granted its first extension in late February when it was given extra time to continue talks intended to stave off a potential bankruptcy protection filing.

The extension restricted Canwest to borrowing $112 million, down from $300 million, by its lender Scotiabank.  The company has already borrowed $92 million.

"The only problem is [that] another 10 days isn’t likely to change things, " said Duncan Stewart of DSAM consulting.

" When you have tens of millions in debt payments, hundreds of millions in lines of credit and billions in debt, selling one or two or three or four million-dollar chunks of small subsidiaries, it’s like drowning in the ocean and having somebody on the shore bailing it out with a teaspoon. It doesn’t really change the overall level of the water."

Friday is the due date for subsidiary Canwest Media to pay back interest on its senior notes, a payment that DBRS estimates is about $38 million.

With files from Canadian Press