The official regional newspaper publisher of the 2010 Winter Olympics has filed for creditor protection 35 days before the 21st Winter Olympiad.
The filing under the Companies' Creditors Arrangement Act applies to Canwest Limited Partnership, which owns Canwest Publishing Inc., Canwest Global Communications's newpaper and digital media subsidiary that became an official 2010 Olympics media supplier in April 2008.
The filing affects virtually of Canwest's newspapers, including the Vancouver Sun, the Province, the Times Colonist and its staple of community newspapers, including the North Shore News and the Vancouver Courier.
The filing, however, does not include the National Post and related properties, which was transferred to Canwest LP after Canwest Global Communications Corp., filed for creditor protection last October.
Canwest said the voluntary filing is part of agreement with its senior lenders to implement a pre-packaged financial restructuring plan that will deal with the limited partnership's debt, while also preserving jobs and protecting the company's newspaper brands. Canwest LP's subsidiaries affected by the latest filing impacts roughly 5,300 employees across Canada.
The move comes 20 months after Canwest Publishing signed on to be an official media supplier for the 2010 Winter Olympic and Paralympic Games, which was the largest sponsorship commitment in Canwest's history.
Since then, however, the company has fallen on difficult times. Canwest LP had a difficult 2009, reporting a 15% decline in revenue to $1 billion from $1.2 billion for the year ending August 31. Operating income fell 58% to $104.5 million from $248.3 million, pushing the company to a net loss of $66 million compared with a net profit of $143.5 million in 2008.
Canwest LP has not made any interest or principal payments on its $1.5 billion worth of secured and unsecured debt since May 31, 2009. Last August, the company signed an agreement with its lenders to develop and implement a restructuring plan.
Under the proposed plan announced with the CCRA filing, Canwest LP's senior lenders will acquire the affected media properties and assume certain operating liabilities if a buyer is not found. RBC Capital Markets has been hired to look for a buyer for Canwest's papers, including the National Post.
However, the proposed agreement still requires approval by a majority of senior secured lenders who hold at least two-thirds of the amount of debt outstanding.
Canwest said operations affected by the filing will continue uninterrupted during the restructuring with operating cash flows sufficient to fund ongoing operations. Canwest LP, however, has arranged for debtor-in-possession financing of up to $25 million from certain members of senior secured lenders.