Canwest sells newspaper chain for $1.1 bil

Funds to be used to pay around $925 million owed to lenders

TORONTO -- Canwest Global Communications Corp. has sold its insolvent chain of daily newspapers to a consortium of unsecured bondholders led by Paul Godfrey for $1.1 billion.

Godfrey is president and CEO of the National Post newspaper, which is part of the CanWest LP division. His consortium beat out a rival bid from Torstar Corp., the Toronto-based newspaper publisher.

The $1.1 billion price tag, which includes $950 million in cash, will be used to pay down around $925 million owed to lenders so the newspaper chain can emerge from bankruptcy protection.

The Ontario Superior Court of Justice, which is directing Canwest Global Communications through creditor protection, must approve the sale as part of a deal expected to close by July 15.

Canwest Global earlier struck a separate deal to sell its TV division to cable operator Shaw Communications for $2 billion.
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