TORONTO – Canwest said this evening its senior lenders agreed today to extend the company’s access to credit until April 21st as it searches for ways to recapitalize.
“While this is only two weeks, it is part of an ongoing discussion between the company and its lenders in which we seek to reach a longer term solution. Between now and April 21, we aim to negotiate a further extension in order to achieve that,” said CEO Leonard Asper in an e-mail to employees today.
Canwest has been struggling all year long and has been shown a lot of flexibility by its lenders and bondholders as it analyzes a number of strategies for survival, including selling off pieces of the company, like its E! network.
The company also faces a April 14th deadline to pay $30 million in interest owed to bondholders – a payment which has already been extended from March 15th.
“Our discussions with our senior lenders and bond holders have been constructive and positive, and we are continuing to develop a plan that demonstrates to our lenders that we can recapitalise the company. To do this we need a longer timeframe and their continued support,” added Asper’s memo.
Asper also lauded the company’s audience growth and noted that cutbacks in employees and other expenses will reduce the company’s annual costs by $100 million.
“I know that this has meant tough decisions are being made. We have exited non-core business and said goodbye to colleagues. None of these decisions are easy but they are necessary and they are having an impact,” wrote Asper.
“We are faced with unprecedented economic pressures and we must seriously look at the way we do everything in an effort to best position this company for an eventual economic recovery that we know is coming. When that time comes it won’t be a matter of going ‘back to normal’ but figuring out how to succeed in a new world. That has been our focus for the last number of years, and the hard work we are doing now will get us there.
“I know this causes uncertainty and challenges for you, our suppliers and our advertisers but we know that we must pull through this. Every week, 25 million Canadians count on Canwest for their news, information and entertainment,” reads the memo. “Canadians turn to our newspapers – in print and online, our destination websites and our television programs every minute of every day. These audiences represent the best cross-platform marketing opportunities available to advertisers, period. It is for all those reasons that our success isn’t optional, it’s essential and, I believe, inevitable.”
– Greg O’Brien
