Creditors to vote on Canwest newspaper sale

Planned sale to consortium of bondholders for $1.1 bil

TORONTO -- As Canwest Global Communications Corp. continues to flesh out its bankruptcy exit plan, the broadcaster has proposed creditors vote June 10 on its newspaper division sale.

An Ontario court gave Winnipeg-based Canwest Global approval to canvas creditors on a planned sale of its insolvent Canwest LP division to a consortium of unsecured bondholders led by Paul Godfrey for $1.1 billion.

The Ontario Superior Court of Justice, which is directing Canwest Global Communications through creditor protection, on Monday is expected to approve the sale of the newspaper division so the overall transaction can close as planned by July 15.

The Godfrey-led consortium beat a rival bid from Torstar Corp., the Toronto-based newspaper publisher, to secure the stable of Canadian newspapers and digital assets.

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 Canwest LP unit can emerge from bankruptcy protection.

Canwest Global earlier struck a separate deal to sell its TV division to cable operator Shaw Communications for $2 billion as part of a deal expected to close by late summer.