Investor devalues Canwest
EmptyA day after Canwest Global Communications secured a one-week deadline extension from U.S. bondholders, 22.6% stakeholder Fairfax Financial Holdings said it is writing down its investment in the debt-strapped media group.
Fairfax CEO Prem Watsa told an annual shareholders meeting in Toronto that the Canwest stake has been marked down heavily to reflect a 94% collapse in the value of the broadcaster's stock during the past 12 months.
The Fairfax stake in Canwest is now worth about CAN$5.5 million ($4.5 million), compared with a year-earlier value of CAN$98 million.
The overall market value of Canwest is about CAN$30 million ($25 million), based on a Wednesday closing price of CAN25 cents a share on the Toronto Stock Exchange, an 8% increase on the day.
That market capitalization is well below the CAN$2 billion Canwest, controlled by the Asper family of Winnipeg, Manitoba, was worth before the economic downturn, which has hit its newspaper and TV assets hard.
On Tuesday, the broadcaster secured a one-week reprieve after failing to make an overdue $30.4 million payment to U.S. bondholders.
Canwest said it received an extension until April 21 from a majority of the U.S. bondholders who are owed $761 million.
That brings the debt talks with the U.S. noteholders in line with separate negotiations with senior lenders on a CAN$300 million ($250 million) credit facility that also has an April 21 deadline.
The $30.4 million payment was originally due on March 15. (partialdiff)