* Debt waiver extended to April 7
* In talks to extend credit even further
TORONTO, March 11 The media unit of Canwest
Global Communications Corp CGS.TO and its senior lenders
agreed to extend a waiver of loan conditions until April 7 so
that Canada's biggest media company can stay operating while it
seeks a route to an eventual recapitalization.
Canwest said on Wednesday that it would not make an
interest payment of about US$30.4 million due on March 15 but
it said that under the terms of the notes, its creditors cannot
demand payment of the US$761 million principal amount if the
interest is paid by April 14.
It said that if talks with its senior lenders and a
creditors' committee are successful it will be able to extend
access to its credit facility beyond April 7 and then pursue a
The news came after Canwest said late last month that its
banks had permanently cut the senior credit facility of its
main Canwest Media unit to C$112 million ($87.50 million) from
The company and its banks had agreed to keep talking on
revamping the credit facility until Wednesday, March 11.
Canwest said at the time that C$92 million of the C$112 million
total has already been drawn down.
Canwest said on Wednesday that its media unit and financial
institutions had terminated certain currency and interest rate
swap agreements related to its senior subordinated notes,
resulting in net proceeds to Canwest of about C$105 million,
which has been used to reduce obligations under its senior
The company said it believes it has "sufficient liquidity"
to operate normally through April 7 including about C$30
million cash-on-hand and access to a further C$20 million
through its senior credit facility.
Analysts have said that it is possible that Canwest, with
its debt load of about C$3.7 billion, may file for bankruptcy
protection as the weak economy wreaks havoc on advertising
revenues at its stable of television stations and newspapers.
Canwest, which owns the Global television network and a
chain of daily newspapers in Canada, is trying to slash its
operating and capital costs and is looking at divesting
non-core assets. It is considering selling five conventional TV
stations and agreed to sell its stake in sports broadcaster
The Winnipeg, Manitoba-based company has also sold The New
Republic magazine in the United States to a group of private
investors, including the magazine's editor-in-chief.
Canadian financial services giant Fairfax Financial
Holdings (FFH.TO) owns about 22.4 percent of Canwest's
subordinate voting shares and analysts have speculated it could
step up with some sort of refinancing proposal for Canwest.
A big part of Canwest's debt dates back to its 2000
acquisition of a stable of Canadian newspapers from Hollinger
International for about C$3.2 billion.
That deal made Canwest the country's biggest publisher of
daily newspapers. It included 13 big-city dailies as well as
126 community newspapers, Internet assets and a 50 percent
stake in the National Post, a national newspaper. The company
later bought full control of the Post.
In 2007, Canwest expanded its television holdings by
partnering with an affiliate of U.S. investment bank Goldman
Sachs (GS.N) to buy specialty TV group Alliance Atlantis
Communications for C$2.3 billion.
Canwest is controlled by the Asper family of Winnipeg.
Aside from its Canadian newspaper and TV assets, it also has
television holdings in Australia through its stake in Network
Media groups such as Canwest are facing a big drop in
advertising revenue as companies have cut back marketing
spending as they tighten their belts to weather the economic
(Reporting by Wojtek Dabrowski in Toronto and Sinead Carew in
New York; editing by Richard Chang)