Company says limited partnership which controls the bulk of its daily newspapers will miss an $18.5-million payment

Source: Globe and Mail

THE CANADIAN PRESS

Canwest Global Communications Corp. (CGS-T) said Monday the limited partnership which controls the bulk of its daily newspapers will not make an $18.5-million (U.S.) interest payment initially due August 1.

The partnership is a subsidiary of the Winnipeg-based media conglomerate which operates all the company's daily newspapers except the National Post.

Despite the payment deferral on the subsidiary's senior subordinated notes, Canwest said creditors are not in a position to demand that the partnership repay the full $400-million it owes until at least Sept. 1.

The company said the decision to withhold the interest payment will allow the partnership to operate normally as it continues restructuring talks with its lenders, a process being duplicated throughout the company as it attempts to refinance its massive debt load.

The Canwest group as a whole, which includes the Global television network and other broadcast operations in several countries, is struggling under about $4-billion (Canadian) in debt.

The company has been negotiating for months with various bankers, bondholders and other creditors to come up with a plan that would allow Canwest's businesses to continue operating.

Canwest has also been working to unload some of its assets, recently announcing the sale of Hamilton's CHCH-TV and Montreal's CJNT-TV to a Toronto company.

The company also said it would be closing conventional television stations in Victoria and Red Deer, Alta., putting approximately 80 people out of work.

© Globe and Mail