In Canada it is called a court filing under the Companies’ Creditors Arrangement Act, but it’s the equivalent of a Chapter 11 filing in the US – and that’s what Canwest did Tuesday. The Canadian TV/newspaper giant said its voluntary recapitalization is backed by the vast majority of its creditors.
The curt filing came after Canwest reached agreement with members of the ad hoc committee of 8% senior subordinated noteholders of Canwest Media Inc. (CMI) on terms of a recapitalization.
“The recapitalization transaction will ensure that a recapitalized CMI will be a stronger industry competitor with a renewed financial outlook,” the company said.
Canwest Global Communications Corp., Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries on Tuesday voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies’ Creditors Arrangement Act (CCAA).
“Operations will continue uninterrupted during the recapitalization process and obligations to employees and suppliers of goods and services provided after the filing date will continue to be met after the filing date,” a company statement said. Canwest management remains responsible for the day-to-day operations. Canwest also announced that it had secured debtor-in-possession (DIP) financing of up to $100 million. “The additional liquidity provided by the proceeds from the sale of TEN Network Holdings Limited’s shares, combined with the Company’s operating revenue and the DIP financing are intended to provide sufficient liquidity to meet ongoing obligations and ensure that normal operations continue without interruption while the Recapitalization Transaction is implemented,” the statement said.
“Throughout this process, all our operations will continue uninterrupted. We are firmly committed to moving quickly to restructure the company and emerge from creditor protection financially stronger and more competitive,” said Canwest President and CEO Leonard Asper.