Newspaper-chain bidders begin Phase 2, visit operations

Source: Vancouver Sun

Bidders for Canwest LP, the newspaper division of Canwest Global Communications, will soon be visiting operations in the chain they hope to purchase.

Canwest announced Friday that an unspecified number of suitors have been invited to participate in Phase 2 of the sale process, which will involve management presentations, site visits and further due diligence before the submission of binding proposals.

Canwest also said in a media statement that Dennis Skulsky, president and chief executive officer of Canwest Publishing, will continue to lead the publishing division and participate in the sale until the end of the sale's Phase 2 on April 30, when Skulsky's recent resignation will take effect.

After that, Skulsky will remain as an adviser to Canwest LP until Aug. 31.

Skulsky was appointed chief executive of Canwest LP in May 2006.

He previously spent six years as president and publisher of Canwest's Pacific Newspaper Group, which operates The Vancouver Sun and the Province.

During Phase 1 of the sale of Canwest LP, which is restructuring under creditor protection, a group of suitors bid for the entire chain while others bid for specific portions of the chain.

Only bidders for the entire chain were invited to participate in Phase 2 of the sale launched by senior lenders led by a consortium of five Canadian banks.

Faced with a decline in advertising revenues because of the recession, Canwest LP filed for creditor protection Jan. 8 after tripping over interest payments on about $1.5 billion in debt.

The voluntary filing and protection granted under the Companies Creditors Arrangement Act (CCAA) has allowed the publishing group to operate as usual but provide debt relief while it continues to work on a recapitalization plan.

Following court approval, Canwest LP's secured lenders -- which together hold $953-million in debt -- began to solicit offers for the publishing division, which includes the National Post and 10 major city dailies including The Vancouver Sun, the Province, Victoria Times Colonist, Edmonton Journal, Calgary Herald, Saskatoon StarPhoenix, Regina Leader-Post, Windsor Star, Ottawa Citizen and Montreal's The Gazette.

The unit also owns 26 community newspapers, as well as associated online and mobile properties.

The chain has a combined daily circulation of 1.3 million subscribers and employs 5,300 people across Canada.

© Vancouver Sun