Media giant short on time

TORONTO — Canwest Global Communications Corp. (TSX:CGS) shares lost more than half their value Thursday in the heaviest trading of the battered stock in nearly eight years.

THE CANADIAN PRESS

TORONTO — Canwest Global Communications Corp. (TSX:CGS) shares lost more than half their value Thursday in the heaviest trading of the battered stock in nearly eight years.

The struggling media giant’s shares fell 7.5 cents to close at 6.5 cents on the Toronto Stock Exchange, a drop of nearly 54 per cent, on a volume of nearly 10.2 million shares traded.

A company once worth more than $2 billion years ago and about $600 million in early 2008 now has a stock market value of just under $7 million and faces an uncertain future and likely major restructuring to deal with a massive debt.

The trading triggered speculation the Winnipeg media company could be on the brink of filing for bankruptcy protection under the federal Companies’ Creditors Arrangement Act.

“We never comment about a stock value,” said Canwest spokesman John Douglas from Winnipeg.

Canwest reports its fiscal third quarter earnings Friday, a financial report that’s expected to include an update on the company’s battered finances and the state of talks with creditors and bankers.

The Canwest group, which includes the National Post newspaper and big city dailies across Canada, Global television network and other broadcast operations in several countries, is struggling under about $4 billion in debt.

The company has been negotiating for months with various bankers, bondholders and other creditors to come up with a plan that would allow Canwest’s businesses to continue operating.

“Canwest has been a never ending bad news story for the better part of the last year,” said Carmi Levy, an analyst at consulting firm AR Communications Inc.

Last week, the company extended its deadline to reach an agreement in principle with certain key creditors on a long-term recapitalization until July 17. The company much reach a definitive agreement by July 31.

Canwest also been struggling to sell off assets to appease the lenders, and last week agreed to sell two of its local TV stations — CHCH-TV in Hamilton and CJNT-TV in Montreal — to specialty television company Channel Zero.

“The clock has been ticking all along, but I think time is about to run out for Canwest,” Levy said.

“There aren’t any additional options open to the company, and I think debtholder patience is about to run out soon.”

Analysts and industry observers have been surprised by how long Canwest has managed to coast with its lenders, especially since some were predicting they’d file for bankruptcy months ago.

However, the company has received several stays of execution from the banks, partly because of the downtrodden economy has devalued many of its assets and made them difficult to sell for a reasonable price.

In the previous quarter, Canwest reported a net loss of $1.44 billion, including a $1.19-billion writedown of assets, mostly in its newspapers. Revenue was $637 million, down by nine per cent from $701 million.

The company has been struck by an overall downturn in the media industry, which has affected advertising revenues at its newspapers and television stations. Many U.S. newspapers are restructuring under bankruptcy protection or are up for sale and broadcasters are also writing off the value of their money-losing conventional stations.

Canwest was once was a high-flyer on the stock market as investors valued its prized stable of newspapers, TV stations and Internet properties. But the company controlled by Winnipeg’s Asper family through a dual share structure has been fighting financial headwinds for years after an acquisition binge fuelled by debt.

The economic downturn only worsened the debtload Canwest was carrying on its back from the acquisition of the Alliance Atlantis specialty TV channels and other assets for $2.3 billion in 2007, and the $3.2 billion cost of buying Conrad Black’s Hollinger group in 2000.

Analysts have speculated for months that a major restructuring of Canwest or possible bankruptcy protection filing could see the company streamlined or split up into various pieces that could be sold to reduce debt.

Just Posted

One strong wind leaves years of replanting work for Red Deer parks staff

High visibility boulevards already replanted, neighbourhood work starts next year

Red Deer-area indigenous filmmakers invited to apply for $20,000 grant

Storyhive launches Indigenous Storyteller Edition

Restaurant closed after compliance team patrol

Public Safety Compliance Team checked eight bars and restaurants on Oct. 19

Red Deerians await local cannabis stores

So far 31 stores in Alberta awarded licence to operate

Rimbey RCMP seek missing man with health concerns

Has anyone seen Bill Harris of Ponka County?

WATCH: Make-A-Wish grants Star Wars loving teen’s wish

The Make-A-Wish Foundation granted Anakin Suerink’s wish in Red Deer Saturday afternoon

Local Sports: Rudy Soffo valuable to Kings on the court

When Rudy Soffo first saw the RDC basketball Kings roster he was… Continue reading

Except for 1 kick, Saints, Ravens are evenly matched

BALTIMORE — In a matchup between the league’s highest-scoring offence and top-ranked… Continue reading

Julia Louis-Dreyfus gets a top award for comedy

WASHINGTON — After a 35-year acting career and with two iconic television… Continue reading

Ricky Skaggs, Dottie West enter Country Music Hall of Fame

NASHVILLE — Bluegrass and country star Ricky Skaggs, singer Dottie West and… Continue reading

AP Exclusive: Stephen Hawking’s wheelchair, thesis for sale

LONDON — Stephen Hawking was a cosmic visionary, a figure of inspiration… Continue reading

Canada deemed U.S. a safe country for asylum seekers after internal review

OTTAWA — Canadian immigration officials have determined that the United States remains… Continue reading

Bombardier sues Mitsubishi over alleged theft of aircraft trade secrets

MONTREAL — Bombardier is suing Mitsubishi Aircraft in the United States over… Continue reading

Three strong earthquakes reported in Pacific Ocean off Vancouver Island

Three relatively strong earthquakes were recorded Sunday night in the Pacific Ocean… Continue reading

Most Read