UPDATE 3-Canwest loss grows, focus stays on debt

* Q3 shr loss C$0.62 vs loss C$0.16 last year

* Adj Q3 shr loss C$0.32 vs profit C$0.07 year before

* Revenue falls to C$726.8 mln from C$846.2 mln

* In talks on recapitalization plan

* Considers cash investment, converting debt to equity

* Stock gains C$0.01 to C$0.075 on TSX (Adds details from conference call, analyst's comments, stock price)

By Susan Taylor

OTTAWA, July 10 (Reuters) - Canwest Global Communications (CGS.TO) reported a bigger quarterly loss on Friday as the Canadian media company, struggling to stave off bankruptcy, was hit by a big writedown and declining revenue.

Trying to stay afloat as it wrestles with a debt load of close to C$4 billion ($3.4 billion), the company said it is in default under terms of its credit facilities and continues work on a recapitalization plan.

The financial restructuring may involve a cash investment and, or, a conversion of some existing debt to equity, it said.

"These transactions are, as you can expect, quite complex, but we're making some headway," Chief Executive Leonard Asper said during a conference call.

"And our goals remain the same, which is to position our assets for the future and take advantage of the economy once it begins to improve with the proper capital structure."

Significant debt reduction is needed to resolve liquidity issues and continue operating, Canwest said in a statement.

If it fails to find an acceptable recapitalization plan by July 17 with holders of its 8 percent senior subordinated notes, the company said it could face demands to immediately repay all debt.

"There's been a series of deadlines...so I think whether that's ultimately extended, or not, is hard to say at this point," said Chris Diceman, senior vice president at credit rating agency DBRS.

"I'm somewhat surprised at the patience they've (bondholders) had to date, but clearly there is something worth negotiating over."