All about business

Canwest Global Communications Corp. (TSX: CGS), a Winnipeg media company facing growing financial pressures, says it has had its $300-million credit line permanently cut, but has won a 12-day extension for further talks to stave off a potential bankruptcy protection filing.

The company said late Friday its Canwest Media unit and senior bankers have agreed to extend the waiver on borrowing conditions on its debt until March 11 while they continue talks. The banks have also permanently cut the company's $300 million credit line by nearly two thirds to $112 million.

The moves Friday give Canwest access to only another $20 million in credit, since $92 million has already been advanced by Bank of Nova Scotia to Canwest Media, the unit which operates the company's newspapers and other assets.

The debt repayment extension gives Canwest Media another two weeks to comply with its debt covenants, but also puts more pressure on the parent company to cut costs, sell non-core assets and further streamline to get its balance sheet in order and win back the backing of its bankers.

Employees at Canwest and its flagship National Post daily in Toronto expressed private concerns that the publication could be forced to close as the parent company looks at all options to deal with its debt troubles.

But company representative Phyllise Gelfand said Friday "it's business as usual" for the daily, which has operated for more than a decade but lost millions of dollars.

"I'm in the same building and they (Post employees) look busy putting the paper together," Gelfand said in an interview.

In its statement late Friday, Canwest said it has enough cash on hand, along with current cash flow projections, to operate normally to March 11.

After that, it's anyone's guess what will happen, although the company said it will continue talks with bankers on extending the debt repayment deadline beyond that date.

"Canwest continues to take proactive steps to reduce its operating and capital costs, restructure its operations and improve efficiencies," the company said.

"It is also reviewing its strategic alternatives and continues to actively pursue opportunities to divest of non-core operations and assets, and collect other amounts that it is owed."

Canwest CEO Leonard Asper has been meeting banks and potential investors on Bay Street and elsewhere so the company can raise enough new capital to help pay off debt as the recession has dimmed the financial prospects of its newspapers and television stations.

Some reports have said the Asper family may have to surrender control of Canwest in return for new financing no fax payday loans.

Earlier Friday, Canwest stock rose 1.5 cents to close at 35.5 cents, a gain of 4.4 per cent, on the Toronto Stock Exchange in trading of more than 919,000 shares.

The company, which carries a staggering $3.9-billion debt load, has been struggling to sell several of its non-core assets in an attempt to pay off its debts, incurred from past newspaper and television acquisitions.

Earlier this month, Canwest placed its five E! network television stations on the block, though none of them have been sold yet.

On Wednesday, Canwest announced it's selling part of its 26 per cent stake in sports broadcaster the Score for $6.62 million and hired an investment bank to find a buyer for the rest.

Canwest, which owns the Global television network in Canada, a chain of big-city Canadian daily newspapers and broadcast businesses in several countries, reported last month its advertising sales have eroded badly because of the deteriorating economy.

In its last financial report, the company posted a $33-million quarterly loss, or 18 cents per share, reversing a year-earlier profit of $41 million or 23 cents per share.

The major media company recently cut 560 jobs, or about five per cent of its workforce, including 210 at Global Television and its other TV operations.

Canwest once was a high-flyer on the stock market as investors valued its prized stable of newspapers, TV stations and Internet properties. But the company controlled by Winnipeg's Asper family through a dual-share structure has been fighting financial headwinds for years after an acquisition binge fuelled by debt.

Canwest owes about $3.9 billion from the acquisition of the former Southam newspaper chain from the Hollinger group in 2000 and most recently the specialty TV stations once owned by Alliance Atlantis.

The debt has dragged down the company's finances, produced consistent losses and turned Canwest shares into penny stocks.

A company once worth more than $2 billion years ago and about $600 million in early 2008 now has a stock market value of just under $40 million and faces an uncertain future.

Apart from the recession, Canwest and other broadcasters have seen the profitability of conventional TV stations squeezed by competition for advertisers and viewers from specialty channels and the Internet.

Analysts speculate that a major restructuring of Canwest or possible bankruptcy protection filing loom, which could see the company streamlined or split up into various pieces that could be sold to reduce debt.

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