April 15, 2009

Canwest media gets debt extension

Bondholders for Canada's largest media company, Canwest Global Communications Corp., gave the company another week to make a $30.4 million interest payment.

After missing a payment to bondholders March 15, the company had a Tuesday deadline to come through, The Globe and Mail reported.

The newspaper publisher and broadcaster is in two sets of talks -- one with lending banks and also with bondholders, who have secondary access to the funds after the banks.

The Globe quoted sources as saying the apparent goal was a recapitalization to avoid filing for bankruptcy protection with $3.9 billion in debt.

Had the bondholders not agreed to extending talks they could have demanded immediate repayment of about $761 million in outstanding principal, the report said.

In a research note, BMO Nesbitt Burns analyst Tim Casey struck a gloomy note for the company.

Canwest is faced with several near-term liquidity challenges, he wrote. Based on these major liquidity challenges, it seems unlikely to us that Canwest can continue in its current form.