Canwest to make changes to newspaper auction after noteholders complain

CanWest News Service
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TORONTO - Canwest Global Communications Corp. will make changes to the way the court-supervised sale of its newspapers and online businesses will work, a company spokesman said Monday.
A committee of noteholders had complained the bidding process for Canwest LP, which holds the big city dailies like the Ottawa Citizen and the Montreal Gazette, was not robust enough.
Canwest spokesman John Douglas said the company worked with the group and a mutual agreement has been reached.
"We don't see there being any major problems," he said.
Details of the changes were not immediately available, but Douglas said they would be revealed in court Tuesday.
In documents filed with the Ontario Superior Court, the lenders said the bidding process "as it currently stands will not bring about a robust and competitive bidding process ... and instead will deter such a result."
The noteholders want potential bids under the process disclosed and details of the plan by the Big Five Canadian banks to make a "stalking-horse" bid for the assets released. They also want to extend the time for bids.
Last week, Canwest said senior secured lenders to its Canwest LP subsidiary voted in favour of the plan for the sale.
The lender vote authorized the banks to acquire the assets if a superior offer doesn't emerge by Feb. 26.
Meanwhile, Canwest is seeking Tuesday to have its court protection from creditors extended to April 14 to give it more time to complete its restructuring.
The company's court protection is set to expire Feb. 5.
Canwest has also asked the court to allow it to be able to make intercompany loans to the National Post newspaper.
Since filing for court protection from creditors for its newspaper business, Canwest said its suppliers have started to tighten credit including Hydro Quebec which registered a lien on a Gazette printing plant after a payment was late.
The lien was removed after the company gave the provincial utility a $50,000 deposit.
The company said advertising agencies have expressed concerns and said they plan to cut spending at the Canwest newspapers due to their financial uncertainty.
A number of key suppliers of newsprint, ink and printing supplies have also expressed concern about the company not being able to pay its bills.
Over the past 12 to 18 months, Canwest said it has cut 840 full-time jobs in an effort to cut costs.
Canwest LP expects to cut another 120 during its 2010 financial year.
Canwest filed for protection from bankruptcy for the newspaper arm of its business under the Companies' Creditors Arrangement Act last month after getting squeezed by the recession-induced slump in advertising revenues.
The company is also restructuring its Global TV network business under court protection from creditors in a separate process.

Organizations: Canwest, Ottawa Citizen, Montreal Gazette Ontario Superior Court National Post Hydro Quebec

Geographic location: TORONTO

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