Canwest skips interest payment

Company owes more than $3.5 billion

TORONTO -- Debt-laden Canwest Global Communications Corp. has yet again failed to pay interest on its growing debt mountain.

Winnipeg-based Canwest Global said newspaper publishing subsidiary Canwest Ltd. Partnership deferred an August 1 interest payment of $18.5 million on $400 million in 9.25% senior subordinated notes due 2015.

The 9.25% noteholders will not be able to demand payment of the $400 million principal until September 1.

Canwest Global, which has defaulted on earlier debt agreements, said not paying the interest due August 1 will give the broadcaster and newspaper publisher breathing room to hammer out a wider recapitalization plan with U.S. bondholders and senior lenders.

"Management of the Limited Partnership is in discussions with its senior lenders regarding the current financial circumstances of the Limited Partnership," Canwest Global said in a statement.

Canwest Global secured the $400 million in senior notes in 2007 to help privatize its CanWest MediaWorks Income Fund newspaper division.

Canwest Global on Friday secured another extension to August 14 from its U.S. bondholders and senior lenders to sell off non-core assets and restructure its overall CAN$3.8 billion ($3.52 billion) debt load.