Canwest gets extension on debt deadline
CHCH staff pursue bid to take over local station
March 11, 2009
The Hamilton Spectator and wire services
http://www.thespec.com/News/BreakingNews/article/528375
TORONTO — Canwest Global Communications Corp. secured another reprieve over its financial woes tonight.
Canwest was facing a deadline for renegotiating borrowing conditions on its debt as well as an estimated $38 million in repayments due Friday.
The deadline has now been extended to April 7.
Canwest has been shopping around some assets — including CHCH in Hamilton — and making agreements to sell certain divisions.
This would give lenders confidence that progress is being made, said Chris Diceman, senior vice-president of debt rating service DBRS.
“Should they have additional (deals) that are in the works, I’m thinking the banks might give them some time to fully execute on those.”
Canwest was granted its first extension in late February when it was given 12 extra days 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.
Friday had been the due date for subsidiary Canwest Media to pay back interest on its senior notes, a payment DBRS estimates is about $38 million.
In Hamilton, where the future of CHCH hangs in the balance, a local group is continuing to develop a plan to take local ownership of the station.
Donna Skelly, a CH anchor, has been heading the push to have the station’s licence transferred to a local board of directors.
A company has been incorporated for the project, and confidentiality agreements will be signed soon with Canwest, giving the local group access to detailed financial information.
The group is drafting a business plan for the station, an effort being aided by Paul Bates, dean of McMaster University’s DeGroote business school.
The group’s biggest need right now, Skelly said, is money and she hopes all three levels of government will meet that need.
“We have to draft a business plan and that costs money,” she said. “We’re moving ahead regardless but we’re hoping all three levels of government will step up for this.
“Local news is important to the identity of this city, especially in a recession. It just doesn’t make sense to pull the plug on a local news outlet,” she said.