Canwest Global seeks financial life raft

Company reviewing proposals from outside investors

TORONTO -- Debt-laden Canadian broadcaster Canwest Global Communications Corp. is looking at a possible financial life raft from existing and potentially new investors to stave off bankruptcy protection.

The Globe and Mail newspaper on Monday reported 22%-shareholder Fairfax Financial Holdings and rival Canadian equity player Onex Corp. are among four parties that are apparently ready to trade new financing for equity in the struggling broadcaster and newspaper publisher.

An unspecified Australian fund is also weighing the purchase of Canwest Global's 57% stake in Network TEN.

Onex founder Gerry Schwartz is a former business partner of the late Canwest Global founder Izzy Asper, and his past investments include a minority stake in Los Angeles producer Pheonix Pictures and then troubled U.S. theatre chain Loews Cineplex Entertainment Corp.

Fairfax Financial last month wrote down its investment in Canwest Global to reflect a 94% collapse in the value of the broadcaster's stock in the last 12 months.

The Canadian broadcaster since March has received a series of reprieves from its senior lenders and U.S. bondholders as it attempts to recapitalize the company and restructure its balance sheet.

Canwest Global has complicated those talks by missing a $30.4 million payment to the U.S. bondholders, who are now in a position to demand repayment of the $761 million principal, and breaching key covenants on a $300 million credit line.

A failure to meet its current debt obligations and receive a financial lifeline from new investors could force Canwest Global to file for bankruptcy protection as it attempts to fend off the effects of deep advertising downturn on its newspaper and TV assets.