Canwest on the clock as it seeks solvency

Bankers curb access to $238 mil credit line

OTTAWA -- Canwest Global Communications Corp. and its bankers are negotiating a new borrowing arrangement before a Feb. 27 deadline to allow Canada's largest media group to stay solvent.

Canwest spokesman John Douglas said Friday that the broadcaster and newspaper publisher is following a structured process with senior lenders to agree on "a longer-term solution."

The crunch talks follow Canwest indicating this month that its bankers had curbed access to an existing CAN$300 million ($240 million) credit line to CAN$112 million ($90 million).

Putting Canwest on a short leash came as it struggles to raise cash to service a growing CAN$3.9 billion ($3.1 billion) debt load.

The bankers also told Canwest, controlled by the Asper family of Winnipeg, Manitoba, to negotiate new borrowing terms by month's end.

Douglas discounted media speculation that a reworked borrowing arrangement with existing and possibly new lenders could force the Aspers to give up control of the company.

Canwest shares fell to a historic low Friday on the Toronto Stock Exchange before closing at CAN 35 cents (28 cents), down nearly 18% from Thursday's closing price.