Source: Globe and Mail

CanWest Global Communications Corp. CGS-T has sold its Turkish radio business, part of a continuing effort to shed assets as the company negotiates with banks and bondholders to restructure its debt.

Terms of the sale to Turkish company Spectrum Medya were not disclosed, however the investment in four radio stations was small. The assets were part of a strategy to get in early on a growing economy in Turkey and build a media business. In previous decades, CanWest had executed similar growth strategies in New Zealand and Australia under its late founder Izzy Asper.

But with the company now under pressure from lenders over its $3.9-billion debt, at a time when the recession has caused ad revenue in the media industry to plummet, the company is looking to shed non-core assets. The restructuring talks are aimed at avoiding a filing for protection from creditors.

CanWest purchased a 20-per-cent stake in the Turkish radio stations four years ago in a deal that valued the assets at $61-million (U.S.), and the Canadian company's stake at $12.2-million. CanWest also recently sold a minority stake in The Score, a Canadian sports cable channel, to that company's majority owners and has divested its interest in The New Republic magazine.

Proceeds will be used to pay down some of CanWest's obligations on a credit facility. The company has missed a $30.4-million interest payment to bondholders, who now have the right to demand payment of the $761-million debt associated with those bonds.

The bondholders extended the deadline on talks with CanWest until this Tuesday. In the meantime, CanWest's banks and a special committee representing the company in restructuring talks are considering recapitalization proposals from several groups. The roster is said to include Onex Corp., Fairfax Financial and Brookfield Asset Management, among others.

A final decision on a particular restructuring proposal has not been made but sources indicate the field has been narrowed to one or two key players. Talks are expected to continue over the weekend in advance of the Tuesday deadline. Any restructuring would be done in concert with CanWest's senior lenders and would likely involve swapping debt for equity in the company, if all sides agree.

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