Canwest receives extension on payment
One-week reprieve on $30.4 mil owed to U.S. bondholdersTORONTO -- Canwest Global Communications, Canada's largest media giant, on Tuesday secured a one-week reprieve after it failed to make an overdue $30.4 million payment to U.S. bondholders.
Winnipeg-based Canwest Global said that it received an extension until April 21 from a majority of the U.S. bondholders who are owed $761 million.
Also on April 21, Canwest Global must complete separate negotiations with senior lenders on a $300 million credit facility for which it has also breached debt covenants.
The $30.4 million payment to the U.S. bondholders was originally due March 15.
Missing the payment put the U.S. bondholders in a position to demand repayment of the $761 million principal as well as the unpaid interest payment and default interest.
But Canwest Global said the U.S. bondholders agreed not to demand immediate repayment "to coincide with the expiry date of Canwest Media's waiver agreement with its (credit facility) senior lenders."
Besides it current debt woes, the Canadian broadcaster also has failed so far to rebound from an industrywide advertising downturn that it has hit its newspaper and TV operations hard.
Ratings agency Moody's Investors Service on Monday downgraded Canwest Global on the expectation that it would not make the missed payment to U.S. bondholders by a 5 p.m. Tuesday deadline.
The April 14 deadline refocused investor concerns on Canwest Global's liquidity problems and triggered a selloff of its stock, which fell by 2 cents, or 8%, to 23 cents on the Toronto Stock Exchange.