WINNIPEG – An agreement in principle on the recapitalization of Canwest Global Communications was due today, but in keeping with recent history, yet another dollar deadline has been moved.
The company said today that it is continuing discussions with the members of an ad hoc committee (the “Ad Hoc Committee”) of 8% noteholders of CMI regarding a recapitalization transaction. Last month’s announcement of a $175 million investment said an agreement in principle was supposed to be done today.
This follows months of deadline extensions for the company on financial covenant conditions violations and missed interest payments to bond holders
“The holders of the new 12% senior secured notes of CMI and Canwest Television Limited Partnership as well as CIT Business Credit Canada Inc., the provider of a senior secured revolving asset-based loan facility to CMI, have agreed to extend to June 30, 2009, the date by which CMI must reach an agreement in principle with members of the Ad Hoc Committee in respect of a recapitalization transaction, as well as certain other milestones that were to be achieved by June 15, 2009,” reads the press release issued this evening.
CMI and the members of the Ad Hoc Committee have also entered into a further extension agreement and forbearance to June 30, 2009.
No word on whether or not the deadline to have the recapitalization deal signed and complete, July 15th, has also been extended, but in a memo to staff, CEO Leonard Asper warned staff they have to continue to be patient.
“I recognize that for many, the pace of talks and what seems like endless deadline extensions can be frustrating,” said Canwest CEO Leonard Asper in a memo to staff Monday afternoon. “But in fact, they are a sign that we continue to make headway on the restructuring.”
“In the meantime, we also continue to move the business forward. For example, we have purchased a strong television line-up for next season, we are engaging people like never before on revitalized web sites that support Global and our specialty television channels, and our newspapers launched ‘good news’ pages to provide our readers with a welcome break from all the negativity these days. We are also leading the country by bringing high definition television beyond Toronto and Vancouver to Edmonton and Calgary, providing a better viewing experience and greater exposure for advertisers. Recently, we launched working.com’s first ever Virtual Career Fair connecting more than 3,700 job seekers with more than 150 companies and resulting in new advertisers to Canwest,” he wrote.
“None of this is intended to ignore the challenges that this company faces in the weeks and months ahead. We should expect that our efforts to recapitalize the business will go on throughout the summer.
“We all know that there is still a lot of heavy lifting ahead of us. But the fact is, the company and all of our businesses have to keep doing business, innovating, serving our customers, and beating our competitors. And I’m glad to see we continue to do all these things,” continued Asper’s memo.
“I recognize the importance of tempering optimism with realism. Assets are being sold, we are still going through job losses, and expense management is still a major issue. It will take hard work to succeed and it will require us to follow through on our business strategies – even when it would be easier to sit back and wait for the economy to change. I can assure you that our management team is doing everything we can to preserve jobs, while driving our business strategies forward.
“We can’t wish our way to a successful future, but if you continue to be optimists, and continue to do the great work that you do, success will become a self-fulfilling prophecy.”
– Greg O’Brien
