Sunday, January 10, 2010

Canwest puts newspaper division under court protection and starts auction process

TORONTO - The cross-country newspaper chain run by Canwest Global Communications (TSXV:CGS) is being acquired by the insolvent company's banks for $925 million as they aim to get their loans repaid by selling the National Post and other big-city dailies to the highest bidder in an auction that starts next week.

The Winnipeg-based broadcaster and publisher of the Post and other papers and websites from Vancouver to Montreal said Friday it had reached a restructuring agreement with its creditors, mainly the company's bankers.

Under the deal, the Big Five Canadian banks agreed to make what's considered a "stalking-horse" bid setting the base price for an auction that could fetch more than $1 billion, according to some estimates. The plan keeps the newspaper assets in the hands of Canwest until a group of interested outside buyers are assembled and their offers evaluated.

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