Canadian media giant seeks protection
MONTREAL — Canada’s largest media company, CanWest Global Communications, is filing for court-sanctioned bankruptcy protection, the latest step in its long-running efforts to restructure its crippling debt, which ran as high as $3.6 billion earlier this year.
The voluntary filing is not expected to interrupt the operation of any of its major TV assets. Winnipeg-based CanWest owns Global Television and a host of cablers.
CanWest picked up most of its cable channels when it bought Alliance Atlantis a few years ago, and those channels — which include Showcase, the Food Network and HGTV — are not part of this bankruptcy protection filing.
CanWest has been struggling for months to reach a deal with its creditors ever since it failed to make a $30.4 million interest payment in March.
The company has kept setting, and then extending, deadlines to come up with an arrangement to restructure its excessively high debt.
Its position was helped by the sale of its stake in Australian TV web Ten Network for $600 million, allowing it to take Ten’s debt off its books, for an overall debt reduction of $1.1 billion.
The filing for bankruptcy protection is expected to give CanWest time to reach a new agreement with its lenders.
“This pre-packaged financial restructuring is intended to minimize business disruption and preserve the value of business operations,” CanWest CEO Leonard Asper said in a statement.
All the Canuck networks are in dire financial shape as a result of the downturn in the economy and the pressures facing general interest broadcasters across North America.
The networks will be pleading their case in front of broadcast regulator the Canadian Radio-Television and Telecommunications Commission later this fall, asking that cable and satellite operators be forced to pay a fee to carry their channels.