(Winnipeg - June 10, 2010) Canwest Global Communications Corp. (“Canwest” or the “Company”) announced today that members of an ad hoc committee of and certain other holders of 9.25% senior subordinated notes (the “AHC”) issued by Canwest Limited Partnership / Canwest Societe en Commandite (the “Limited Partnership”) in relation to their bid (the “AHC Bid”) to acquire substantially all of the assets and businesses of the Limited Partnership and certain of its subsidiaries (collectively, the “LP Entities”) have proposed amendments to the composition of their funding commitment.
Yesterday, a meeting of affected creditors to consider and vote on the Plan of Compromise or Arrangement (the “Plan”) was adjourned to allow consideration of this amendment. The meeting will now be held on June 14, 2010 at 10:00 a.m. (EDT) at Sutton Place Hotel (Wellesley Room) 955 Bay Street, Toronto, Ontario.
As previously disclosed, the AHC Bid contemplates the acquisition of substantially all of the financial and operating assets of the LP Entities and all of the shares of National Post Inc. (the “Acquisition”) for an effective purchase price of approximately $1.1 billion, including $950 million in cash funding.
The effective purchase price and cash funding remain unchanged; however, the AHC has proposed that LP Entities’ Plan previously filed with the court, be amended to reflect that the AHC’s total equity commitment of $250 million will be for shares in the new company (“Newco”). Previously, the AHC’s funding commitment to Newco of $250 million was comprised of $150 million in mezzanine notes and $100 million in shares in Newco. Accordingly, the amount of Newco’s debt at emergence will be $700 million rather than $850 million as originally contemplated.
The replacement of the mezzanine notes with equity will increase the notional value of the equity of Newco to $400 million from $250 million as previously contemplated. Unsecured creditors will receive 13 million shares of Newco at a price of $11.54 per share and AHC will receive 27 million shares of Newco at a price of $9.26 per share (as opposed to the originally contemplated purchase price of $10 per share). This provides AHC with an effective fee of 5% of the notional value of the equity of Newco. As a result, up to $130 million of the notional value of the equity will be available under the Plan to unsecured creditors with proven claims against the LP Entities at the time of emergence. This represents up to 32.5% of the notional value of the equity of Newco at the time of emergence. As previously contemplated, unsecured creditors would have received up to $112.5 million or 45% of the notional value of the equity of Newco under the original Plan.
The LP Entities are advised by its financial advisor, RBC Capital Markets, that the amended funding commitment will simplify Newco’s capital structure at emergence by reducing Newco’s leverage by the amount of the mezzanine notes. This may result in an improved outlook for Newco’s credit ratings. FTI Consulting Canada Inc., the LP Entities’ court-appointed Monitor, has recommended that affected creditors approve the amended Plan.
Unsecured creditors with proven claims of less than $1,000 will receive cash payments for the full value of their claims and unsecured creditors with proven claims of $1,000 or more can elect to receive shares in Newco on a pro rata basis or $1,000 in cash.
Affected creditors have received notice of the amendments. A copy of the proposed amended Plan, including a black-lined comparison to the original Plan, will be posted on the Monitor’s website at http://cfcanada.fticonsulting.com/clp.
More information about LP Entities’ restructuring process can be found at www.canwest.com and on the Monitor’s website at http://cfcanada.fticonsulting.com/clp.
Forward Looking Statements:
This news release contains certain forward-looking statements about the objectives, strategies, financial conditions, results of operations and businesses of Canwest. Statements that are not historical facts are forward-looking and are subject to important risks, uncertainties and assumptions. These statements are based on our current expectations about our business and the markets in which we operate, and upon various estimates and assumptions. The results or events predicted in these forward-looking statements may differ materially from actual results or events if known or unknown risks, trends or uncertainties affect our business, or if our estimates or assumptions turn out to be inaccurate. As a result, there is no assurance that the circumstances described in any forward-looking statement will materialize. Significant and reasonably foreseeable factors that could cause the Company’s results to differ materially from current expectations are discussed in the section entitled "Risk Factors" contained in the Company’s Annual Information Form for the year ended August 31, 2009 dated November 26, 2009 filed by Canwest Global Communications Corp. with the Canadian securities commissions (available on SEDAR at www.sedar.com) as updated in its most recent Management's Discussion and Analysis for the three and six months ended February 28, 2010. The Company disclaims any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.
About Canwest Global Communications Corp.
Canwest Global Communications Corp. (www.canwest.com), (TSX-V: CGS and CGS.A) is Canada’s largest media company. In addition to owning the Global Television Network, operating 18 industry-leading specialty television channels and having ownership in 5 specialty television channels, Canwest is Canada’s largest publisher of English-language paid daily newspapers and owns and operates more than 80 online properties.
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For further information:
Media Contact:
John Douglas, Senior Vice President, Public Affairs
Tel: (204) 953-7737
jdouglas@canwest.com
Investor Contact:
Hugh Harley, Director, Investor Relations
Tel: (204) 953-7731
hharley@canwest.com
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