Canwest unloading newspaper division

Paul Godfrey lines up buyout funds for papers

TORONTO -- After selling down its stake in Australian broadcaster Network Ten, debt-laden Canwest Global Communications Corp. has turned to unloading its Canadian newspaper division.

Paul Godfrey, a former CEO of the Toronto Blue Jays pro baseball club and now CEO of the National Post newspaper, has lined up buyout funds to acquire Canwest Global's daily newspapers nationwide for around CAN$1 billion, the Globe and Mail newspaper reported Friday.

The possible sell-off comes as Canwest Global continues crunch talks with U.S. bond-holders and senior lenders to renegotiate its debt and stave off bankruptcy protection.

As part of those creditor talks expected to culminate with a debt-for-equity swap, Canwest Global continues to sell assets to pay immediate debt obligations and strengthen its balance sheet.

Canwest Global was not available for comment at press time. Godfrey's private equity backers aren't the only ones eyeing Canadian media assets of late.

Toronto-based buyout specialists Onex Corp., which sold a big chunk of Canadian exhibition giant Cineplex Galaxy Income Fund last spring, is back on the acquisition trail with a planned IPO for a distressed-debt fund.

Onex Corp. CEO Gerry Schwartz, who has a $4 billion war chest, earlier told his annual shareholders meeting on Sept. 25 that the private equity player was eyeing corporate carve-outs where a parent company looks to sell a key division.

And also this week, indie producer E1 Entertainment said it will raise $910,000 in additional share capital for possible acquisitions.