WINNIPEG – Canwest Global Communications announced Monday that its majority-owned Ten Network Holdings Limited has announced a fully underwritten equity offering of approximately A$138 million that will see the Canadian corporation cut its stake in the Australian TV company to 50%.
“The equity offering represents approximately 13% of Ten Holdings current total shares on issue,” reads the press release. “It will be conducted by way of a placement of ordinary shares to professional and sophisticated investors, and eligible international investors. The equity offering will reduce Canwest’s ownership stake of Ten Holdings from approximately 57% to slightly more than 50%.”
Ten Holdings intends to use the proceeds to pay down debt and enhance its balance sheet flexibility.
Also on Monday, the Canwest Limited Partnership (which owns the company’s newspaper group, not including The National Post), will not make the August 1, 2009 payment of interest of approximately US$18.5 million on its outstanding 9.25% senior subordinated notes due 2015. Under the terms of the notes, the noteholders will not be in a position to demand payment of the approximately US$400 million principal amount of outstanding notes prior to September 1, 2009, according to the release.
“The non payment of interest will provide the Limited Partnership with the ability to continue to operate its business in the ordinary course, as it works to effect a restructuring transaction. Management of the Limited Partnership is in discussions with its senior lenders regarding the current financial circumstances of the Limited Partnership.”
And late on Friday, the company announced yet another extension to the deadline on recapitalization talks with lenders and debtholders. The company is continuing discussions with the members of an ad hoc committee of 8% noteholders of CMI regarding a recapitalization transaction.
“The holders of the 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 August 14, 2009 certain milestones that were to be have been achieved by July 31, 2009. The date by which CMI must enter into an agreement in respect of a recapitalization transaction has been extended to August 14, 2009,” reads the release.
“CMI and the members of the Ad Hoc Committee have also entered into a further extension agreement and forbearance to August 14, 2009.”
