Canwest Global gets new financing
U.S. bondholders will supply Canwest with $100 millionTORONTO – Canadian bankers and U.S. bondholders on Wednesday agreed to pump new capital into debt-laden Canwest Global Communications Corp. to stave off bankruptcy protection.
The recapitalization means the way is clear for the Canadian broadcaster to shop for new and returning U.S. series beginning Thursday at the Los Angeles Screenings.
Winnipeg-based Canwest Global said it reached agreement with a group representing a majority of U.S. bondholders that will see them purchase $105 million of 12% senior secured notes of key subsidiaries Canwest Media Inc. and Canwest Television Ltd.
The U.S. bondholders were owed $30.4 million in overdue interest payments, but agreed not to call Canwest Global on the $761 million principal while negotiations continued up against a Tuesday deadline.
The deal with U.S. noteholders will supply Canwest Global with $100 million in new financing, the broadcaster said.
And separately, CIT Business Credit Canada has agreed to provide a new $75 million senior credit line to the Canwest Media division.
"These facilities are intended to provide Canwest with sufficient credit availability to operate its business in the ordinary course as it continues its work to effect a recapitalization transaction," the broadcaster said Wednesday.
Canwest Global will also use proceeds from the issue and sale of the senior secured notes and the new credit facility to repay outstanding interest payments to current lenders and to "settle related obligations."
To clear the way for both transactions to close on May 21, Canwest Global's senior lenders agreed to extend their waiver agreement on a separate CAN$300 million ($262.7 million) credit line for another two weeks to June 2.
And the U.S. bondholders agreed to extend their own creditor talks with Canwest Global to June 15 to allow time for the purchase of the new senior secured notes.
Canwest Global, which has been teetering in recent months with a CAN$4.1 billion ($3.6 billion) debt load, in recent weeks signaled that it was moving towards an agreement that would see new and existing investors trade new financing for equity in the struggling broadcaster and newspaper publisher.
The refinancing deal follows a series of short extensions since March for the Canadian broadcaster as it held crunch talks with its senior lenders and U.S. bondholders at the same time that it attempted to recapitalize the company and restructure its balance sheet.
The new investment for Canwest Global also removes a cloud hanging over the broadcaster as its senior acquisition executives arrive in Los Angeles on Thursday for the Screenings.
The Canadian broadcaster will face off with rival CTV for new and returning U.S. network shows.
CTV completed its own corporate refinancing on April 30 ahead of the annual TV market.