October 8, 2009 / 11:06 AM / 10 years ago

UPDATE 1-Scotiabank-led team to control Canwest dailies-paper

(Adds details, background)

Oct 8 (Reuters) - A group of creditors led by Bank of Nova Scotia (BNS.TO) will run the daily newspapers owned by Canwest Global Communications Corp CGS.TO, which announced a long-awaited recapitalization plan this week, the Globe and Mail reported on its website.

Canwest LP, the Canwest subsidiary that owns the dailies, in the next few weeks is planning its own debt-for-equity swap, which is likely to include another court filing for creditor protection, the paper said late on Wednesday, citing sources.

The subsidiary owes lenders C$1.3 billion ($1.23 billion), according to the paper.

The creditor group led by Scotiabank, as Bank of Nova Scotia is known, is unlikely to keep the newspapers, which may be taken public in 2010, the Globe said. It cited sources at both Scotiabank and Canwest LP.

The chain of Canwest dailies includes the National Post, Ottawa Citizen, Montreal Gazette, Calgary Herald, Vancouver Sun and The Province.

Canada’s newspapers, like those elsewhere, have been hit hard by the recession, which has prompted massive cutbacks in corporate advertising spending, and by growing competition from the Internet, which is biting into circulation numbers.

Reuters could not immediately reach Scotiabank and Canwest outside regular Canadian business hours.

On Tuesday, Canwest, Canada’s biggest media company, announced a recapitalization plan that will see parts of the company file for bankruptcy protection.

For related story, please see [ID:nN06262663]

$1=C$1.056 Reporting by Ajay Kamalakaran in Bangalore; Editing by Lincoln Feast and Lisa Von Ahn

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