Source: Canadian Press

WINNIPEG — Canwest Global Communications Corp. said Friday that its publishing subsidiary, which is operating under court protection from creditors, has signed a deal for $25 million in debtor-in-possession financing.

The senior secured super-priority financing will be available to Canwest Limited Partnership and its subsidiaries.

Earlier this week, the publishing division was granted an extension of creditor protection until April 14 to give the company time to complete its restructuring.

The company is in the process of auctioning its newspaper assets.

The Big Five Canadian banks have 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 company has already received outside offers for its newspaper division, though it is unclear whether any of them are considered superior to the banks' asking price.

Since filing for court protection from creditors for its newspaper business, Canwest said its suppliers have started to tighten credit and advertising agencies have also expressed concerns.

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 that expires March 31.

© The Canadian Press