Following marathon talks with bankers, Canwest Global Communications Corp. is to file for bankruptcy protection today to complete a controlled recapitalization plan. Canwest Global said it will voluntarily file for creditor protection under Canada’s Companies’ Creditors Arrangement Act.
A majority of U.S. bondholders owed $761 Million (and a missed interest payment) by Canwest Global agreed to the move that will effectively place Canwest in the hands of distressed debt and vulture funds.
According to Canwest President and CEO, the financial restructuring is intended to minimize business disruption and preserve the value of Canwest’s business operations. Asper added Canwest and its 1,700 employees expect to emerge from CCAA protection in four to six months “on a stronger footing for the future.”
Asper and his family are to lose control of Canwest as part of the recapitalization however the U.S bondholders and senior lenders who now control Canwest Global’s destiny agreed to allow the Asper family to invest up to $15 million in a restructured broadcaster.