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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

There were six additional deaths across Alberta reported over the past 24 hours, bringing the death toll to 1,926 since the beginning of the pandemic. (File photo)
AstraZeneca vaccine is ready to be used at a homeless shelter in Romford, east London, Wednesday, Feb. 3, 2021. THE CANADIAN PRESS/AP-Frank Augstein
AstraZeneca-linked blood clot confirmed in Alberta

A case of an AstraZeneca-linked blood clot has been confirmed in Alberta,… Continue reading

The Red Deer Catholic Regional Schools Board of Trustees selected the name St. Lorenzo Ruiz Middle School to be built in the north end of Red Deer. (Photo Courtesy of  Red Deer Catholic Regional Schools)
Red Deer Catholic Regional Schools raises about $8,720 for Terry Fox Foundation

Red Deer Catholic Regional Schools raised about $8,720 for the Terry Fox… Continue reading

A nurse gets a swab ready at a temporary COVID-19 test clinic in Montreal, on Friday, May 15, 2020. Health Canada has reversed course on home test kits for COVID-19, saying it will now review applications for such devices. THE CANADIAN PRESS/Paul Chiasson
Alberta declines Ontario’s request to send health-care workers

Alberta is “not in a position” to send health-care workers out of… Continue reading

The Red Deer Rebels allowed four straight goals from the Medicine Hat Tigers Friday night on the road. (Photo by Rob Wallator/ Red Deer Rebels)
Tigers hand Red Deer Rebels 10th straight loss

Tigers 4 Rebels 2 Through 17 games in the shortened WHL season,… Continue reading

Red Deer Public Schools will not pilot the new draft curriculum at its elementary schools. (File photo contributed by Red Deer Public Schools)
UPDATED: Red Deer Public Schools says no to piloting new curriculum

Alberta Teachers’ Association support school boards

Ontario Premier Doug Ford points on a COVID-19 caseload projection model graph during a press conference at Queen's Park, in Toronto, Friday, April 16, 2021. Ontario was set to backtrack on controversial new police powers to enforce stay-at-home orders implemented in the battle against COVID-19.THE CANADIAN PRESS/Frank Gunn
Ford backtracks on new police COVID-19 powers amid intense backlash

TORONTO — Furious criticism of new anti-pandemic powers that allow police in… Continue reading

The official program for the National Commemorative Ceremony in honour of Prince Philip, The Duke of Edinburgh, sits on an empty pew prior to the ceremony at Christ Church Cathedral in Ottawa on Saturday, April 17, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Prince Philip remembered as ‘a man of great service’ during Canada’s memorial service

Canada’s commemorative ceremony in honour of the late Prince Philip offered a… Continue reading

CF Montreal head coach Wilfried Nancy speaks to his players during the team's practice Tuesday, March 16, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
CF Montreal puts on a show, defeating Toronto FC 4-2 in MLS season opener

FORT LAUDERDALE, Fla. — CF Montreal, carving open Toronto FC’s defence, cruised… Continue reading

Demonstrators using umbrellas as shields approach a point in a perimeter security fence during a protest over the fatal shooting of Daunte Wright during traffic stop, outside the Brooklyn Center Police Department, Friday, April 16, 2021, in Brooklyn Center, Minn. (AP Photo/John Minchillo)
Journalists allege police harassment at Minnesota protests

Some journalists covering protests over the police fatal shooting of Daunte Wright,… Continue reading

A container ship is docked in the Port of Montreal, Wednesday, February 17, 2021 in Montreal.THE CANADIAN PRESS/Ryan Remiorz
Montreal dockworkers begin weekend strikes as talks drag on

MONTREAL — Dockworkers at the Port of Montreal kicked off a series… Continue reading

Brad Dahr, 53, is facing numerous charges. (Photo contributed by Alberta RCMP)
Alberta man charged for alleged sexual offences against children

An Edmonton man has been charged for alleged sexual offences against children… Continue reading

A person walks past a COVID-19 mural designed by artist Emily May Rose on a rainy day during the COVID-19 pandemic in Toronto on Monday, April 12, 2021. Employment lawyers say flouting COVID-19 public health orders when off the job or coming into work while knowingly sick could warrant discipline in the workplace. THE CANADIAN PRESS/Nathan Denette
Risky pandemic behaviour off the clock could mean workplace discipline: lawyers

CALGARY — Employment lawyers say flouting COVID-19 public health orders when off… Continue reading

Vials containing Russia's Sputnik V vaccine for COVID-19 are seen at the San Marino State Hospital, in San Marino, Friday, April 9, 2021.  THE CANADIAN PRESS/AP-Antonio Calanni
China, Russia using their COVID-19 vaccines to gain political influence

OTTAWA — China and Russia have been using their locally produced COVID-19… Continue reading

Most Read