Canwest may sell TV stations

As many as five stations may be on the block as struggling Canwest tries to raise cash.

Canwest Global Communications is considering selling some of its television stations.

The company says it's hired RBC Capital Markets to help the company review strategic options for its conventional television stations. The outlets that may be on the block are CJNT-TV in Montreal, CHCH-TV in Hamilton, CHCA-TV in Red Deer, CHBC-TV in Kelowna and CHEK-TV in Victoria.

Canwest president and CEO Leonard Asper said the stations will not be part of the core of Canwest's Global TV operations or specialty channels in the future.

Conventional broadcasters face tougher times because of the recession and have been squeezed by a slump in advertising and increased competition from specialty channels.

"They've cut where they can cut and now they're going to have to start raising cash by selling assets," said Arthur Heinmaa, managing partner with Toron Capital Markets in Toronto. "This will, at best, buy them some time."

Analysts have suggested other pieces of the company that could hit the market are Australia's Ten television, Canwest's radio station assets in Turkey and the Eyecorp advertising business in Australia. However, the struggling economy and tough credit markets are making it difficult for companies to sell their assets at a good price.

"We really don't know who is going to step up and buy them. I suspect they'll try to shop them to the names you'd expect, but whether or not they're going to be able to pay an acceptable value for them is another question," said Heinmaa.

The company also said on Monday that its bankers had limited borrowing on Canwest Media's credit line to $20 million until Feb. 27. It's already drawn $92 million.

"There has been a further deterioration in the Canadian economy, including in the retail sector, which has negatively affected some of the company's business units beyond what was originally forecast," Canwest stated.

Canwest said last month that its advertising sales have been eroded by the deteriorating economy, and reported a $33-million quarterly loss, or 18 cents per share, reversing a year-earlier profit of $41 million, or 23 cents per share. Revenue was $886 million, up two per cent from $867 million.

Canwest also owns a string of big-city newspaper dailies from Victoria to Montreal and operates the Global Television Network and other businesses in Canada and abroad.