Court approves CA$1.1 billion sale of Canadian media giant Canwest to noteholders

Court approves CA$1.1B sale of Canwest

TORONTO — Canada’s insolvent media giant, Canwest Global Communications Corp., said Monday that the Ontario Superior Court has approved the sale of its publishing division to a group of the company’s creditors.

Canwest Limited Partnership said it will now sell the assets, which include National Post, the Montreal Gazette, Calgary Herald, the Vancouver Sun and Ottawa Citizen, to a group of creditors led by National Post President and CEO Paul Godfrey for 1.1 billion Canadian dollars ($1 billion), including CA$950 million in cash.

The sale, sanctioned by Ontario Superior Court Judge Sarah Pepall, will provide jobs for all of Canwest’s full-time employees, with cuts of up to 10 percent of its part-time work force, Winnipeg, Manitoba-based Canwest said in a statement.

Canwest spokesman John Douglas would not divulge which companies were included in the final bid.

“Canwest is not in a position to provide any guidance as to the makeup of the ad hoc committee,” Douglas said. “Canada has foreign ownership rules for publicly traded companies that the (new acquisition) company will adhere to.”

The Globe and Mail newspaper reported the group buying the newspapers includes U.S. hedge fund Golden Tree Asset Management, TD Asset Management, Invesco Trimark and others.

New York-based Golden Tree specializes in distressed assets and it has been involved in Canwest’s reorganization.

Canwest Global Communications has been restructuring its broadcasting and publishing business under protection from creditors since October after it buckled under a nearly CA$4 billion debt load.

Canwest lawyer Lyndon Barnes said the company will continue moving forward with its plan to close the sale. The Godfrey-led group is aiming to finalize the purchase by mid-July.

“The company is going to work very hard to close the acquisition agreement,” Barnes said.

Canwest also received the go-ahead for a dual-track process, which allows for what is essentially a back-up plan in case the winning bid falls apart. If that were to happen, the sale would revert to the initial offer submitted by the company’s senior lenders, which include some of the big Canadian banks.

“We have the benefit of the comfort of the support agreement behind us if something untoward was to happen with respect to the bond deal,” Barnes said. “It just provides stability for everyone.”

Canwest’s next step will involve obtaining creditor support for its sales agreement, which the company will then take to the bankruptcy court for final approval next month.

Godfrey said in a recent interview that once the transaction closes the newspapers will shed the Canwest name and operate under a new title that has not been determined.

Financial backers plan to make their investment back through an initial public offering for the new company on the Toronto Stock Exchange sometime shortly after regulatory approval.