Canwest unit to defer interest payment
Newspaper, digital unit won't make $8.9 mil paymentTORONTO -- Canadian broadcaster Canwest Global Communications added to its debt woes Friday as its newspaper and digital division chose not to make a CAN$10 million ($8.9 million) interest payment on a senior credit facility.
Winnipeg-based Canwest Global said that subsidiary Canwest Limited Partnership, which operates 38 daily and community newspapers and 80 online businesses, deferred the payment due May 29 as it holds recapitalization talks with lenders.
The broadcaster said that Canwest LP, which carries about CAN$1.4 billion ($1.26 billion) in long-term debt, expects to be in breach of its financial covenants as of May 31.
Canwest Global has separately breached borrowing terms on a CAN$300 million ($270 million) credit facility and $761 million in U.S. senior notes, and is holding parallel recapitalization talks with those lenders as it attempts to stave off bankruptcy protection.
Canwest Global's newspaper operations have been hit hard by the economic downturn, with revenue from auto, real estate, and employment advertising falling sharply.
The broadcaster on May 21 secured CAN$175 million in new loans to pay off pressing creditors and continuing negotiating a restructuring of its broadcast and newspaper operations.