Finally, Canada’s largest newspaper chain is officially for sale.
Senior lenders to struggling Canwest Global Communications Corp, made
up of a consortium of Canadian banks, made a bid. It follows a
voluntary court filing for protection from creditors, which covers
Canwest Publishing, Canwest Books and Canwest Canada Inc. — all of
Canwest’s newspapers, digital media, online and mobile operations
excluding the National Post.
Are we coming to the end of the
decade-long train wreck of Canadian journalism, following Hollinger’s
sale of the former Southam papers to Canwest, and the over-arching
ambitions of a series of wanna-be media moguls who ran once-venerable
journalism organizations off the rails? Who and what will survive the
mangled mess at the end of the track: worker pensions? (I wouldn’t bet on that
given the peril of former Southam employees — though assurances have
been offered.) All of the newspapers from the Vancouver Sun to the
Montreal Gazette? What about a commitment to, or at least a notion of
the role, of journalism playing a role in Canada’s public life?
UPDATE: Canwest being placed under creditor protection and up for sale means “some” suppliers and 50 employees will lose out, according to a memo by company CEO Leonard Asper posted online by Vancouver’s independent Georgia Straight newspaper and also by the Toronto Star.
The Globe and Mail report quoted newspaper union head Arnold Amber warning that nobody yet knows how employees will fare because it is unlikely the banks will remain owners of the papers for long: “The banks aren’t going into the newspaper business … we don’t know what the people who put together this bid really have in mind.”
Here is the official statement by the counsel to the agent bank for Canwest LP’s senior secured lenders:
Transmitted by CNW Group on : January 8, 2010 10:59
Statement regarding Canwest LP CCAA filing
The following statement was issued by McMillan LLP, counsel to the agent bank for Canwest LP’s senior secured lenders
TORONTO, Jan. 8 /CNW/ – Canwest LP’s senior secured lender steering committee, which includes representatives of Canada’s five largest banks and members of the international financial community, supports the company’s board of directors in its decision to proceed with a consensual CCAA filing. This was the result of more than six months of deliberation and discussion between the company and its creditors. The filing is in the best interests of its employees, suppliers and other stakeholders, by providing them with much needed certainty that the businesses will continue to operate.
Canwest LP’s senior secured lenders wish to ensure that the going concern operations of the company are adequately protected. To do so, as part of the CCAA filing senior secured lenders have presented a fair, reasonable and fully-financed proposal to acquire the whole of the company’s business as a going concern. After due diligence, it was determined there is value in acquiring the whole of Canwest LP’s business, given the operating synergies that can be realized from a national chain of newspapers and online businesses.
Should the proposal be successful, the senior secured lenders will facilitate the creation of a new Canadian company with an independent board of directors to manage the ongoing operation of the assets. The majority of the company’s voting shares would be Canadian owned, and all other standards required by the Canada Revenue Agency for media ownership would be met. The company would operate under a more viable and balanced capital structure with a lower debt burden, and it is planned to transition as soon as possible into a publicly-traded corporation.
Within the terms of the proposal, it is envisioned that the new company would retain substantially all of Canwest LP’s employees and would assume all existing collective bargaining agreements and obligations related to rank-and-file employee pensions and benefits.
The senior secured lenders believe the new company would benefit from a strong competitive advantage with the leading English-language newspaper in each of its markets and a national flagship publication.
For further information: Ann DeRabbie, Spokesperson for the agent bank for Canwest LP senior secured lenders, (416) 933-1344