WINNIPEG — The buyers of the newspapers owned by Canwest Global Communications Corp. tweaked their deal Thursday so that the new company will emerge from restructuring with a smaller debt.
The purchase price for Canwest Limited Partnership will still be $1.1 billion, including $950 million in cash.
However, the group of the media company’s bondholders which are buying the papers will increase their total equity commitment to $250 million instead of the original plan for $150 million in mezzanine notes and $100 million in shares.
Accordingly, the company’s debt after it emerges from creditor protection will be $700 million rather than $850 million.
A vote on the change by affected creditors will be held on June 14.
Canwest LP owns and operates daily newspapers across the country including the National Post, Montreal Gazette, Vancouver Sun and Ottawa Citizen as well as more than 20 community newspapers, online operations and other publications.
The group of lenders buying the newspapers are led by National Post president and CEO Paul Godfrey.
The transaction is expected to provide enough cash to pay off the banks, which were owed about $925 million.
As well, Canwest said the offer “also maintains all existing newspaper operations and will provide continuing employment to all existing full-time employees and substantially all part-time employees of the LP Entities. In addition, the new company will maintain all employee pension and benefit plans.”
Godfrey is the former CEO of Sun Media and current president of the National Post. He also used to run the Toronto Blue Jays as a senior executive with Rogers Communications (TSX:RCI.B), the baseball club’s parent.