TORONTO – Goldman Sachs has thrown its support behind a new proposal to restructuring Canwest Global Communications and bring it out of bankruptcy protection.
A group led by Toronto-based investment fund Catalyst Capital which includes the Asper family, former Rogers Broadcasting chief Rael P. Merson and John Tory, announced today that they have submitted to the Canwest Special Committee a restructuring proposal to facilitate the company’s emergence from the CCAA process.
The proposal requires no material amendments to the original court filed plan and would maximize the value of the Canwest estate while expediting its exit from the CCAA process as a public company, according to the release.
The Catalyst Group is proposing to provide $120 million of value for an approximate 32% equity interest and voting control in a restructured Canwest.
This proposal has the support of CW Media Holdings Inc. joint venture partner, Goldman Sachs Capital Partners. The Proposal will also be submitted to the Court in Ontario overseeing the Canwest CCAA restructuring process. Goldman Sachs and Canwest together hold the specialty TV assets of the company in CW Media Holdings and are really the main asset everyone is after.
This proposal is a competing one to the offer Shaw Communications made public last week.
The Catalyst Group will propose that Merson, a broadcasting industry executive with over 20 years of experience and the former President and CEO of Rogers Broadcasting, be appointed CEO. Current Canwest CEO Leonard Asper would be appointed non-executive chairman.
"We believe that our proposal is superior to the Shaw proposal in terms of value, certainty and timing,” said Newton Glassman, managing partner of Catalyst. “The Catalyst Group proposal treats all the company’s unsecured creditors equally and the continuance of a publicly listed Canwest provides creditors and other stakeholders with an immediate path to liquidity.
“The Shaw proposal as it stands results in two separate classes and treatment of creditors, necessarily requires substantial amendments to the court approved plan and faces hurdles that could delay the emergence of Canwest from creditor protection. In addition, it is difficult to see how any proposed deal can be effected without Goldman Sachs Capital Partners. Indeed, Shaw’s own proposal is conditional on coming to terms with Goldman Sachs Capital Partners on a new shareholders agreement,” Glassman added.
"This proposal will allow the public company to pursue a more focused business strategy that allows it to aggressively pursue opportunities in the rapidly changing media landscape,” said Asper. “With respected Canadian partners, a strong capital base and significant broadcast industry experience at the helm, the new company has the opportunity to deliver significant value to its current stakeholders and future public shareholders."
Added Merson, in the release: "At a time when the need for original independent Canadian voices has never been greater, the fundamental logic behind the combination of Canwest’s conventional and specialty television remains very strong. In a rapidly evolving worldwide marketplace for video content, Canada needs strong vibrant local companies to represent its interests.
“The new Canwest will have the scale and resources to be a significant competitor in the Canadian broadcasting industry and a presence in the global market for video content. As consumers demand greater control over how and when they consume their programming, Canwest will have the ability to deliver that content to them whenever and in whatever form they desire,” continued Merson.
“Our proposal positions the new company for success, with a focused, ‘pure play’ broadcast media strategy, the capital resources to invest in quality programming, and significant growth potential. The new company will have a sustainable platform for a competitive, truly Canadian network, and for future value creation. We look forward to this opportunity to invest in and build Canwest for the future."
