Canadian media giant Canwest has asked a court for bankruptcy protection for some of its flagship holdings, including the National Post newspaper and the Global Television Network. The move was expected. Canwest’s finances have been unraveling (revenue dropped 14 percent last quarter, while losses jumped) and the company was unable to make a debt payment in March. At the time, it said it was pursing a “reorganization of its capital structure.”
Under the agreement with creditors, existing Canwest shareholders will control 2.3 percent of the restructured company’s common shares. It’s unclear what percentage of the firm creditors will get, since Canwest says it is looking for “at least” $65 million in new equity financing; the Asper family, which currently controls Canwest, will invest up to $15 million. The NYT says the family’s stake in the holdings will be reduced to under 10 percent.
In a release, Canwest says that the properties that are filing for bankruptcy protection — which also include MovieTime and Fox Sports World Canada — will continue to operate “uninterrupted.” Canwest’s other holdings — including its specialty TV stations, along with its other publishing, online, and mobile operations — are also under default, although creditors have agreed not to take action until Oct. 31.