Postmedia Network completes Canwest purchase, CCAA plan implemented

By Caroline Salls

Pittsburgh, July 13 - Postmedia Network Canada Corp. has completed a transaction that involves Canwest Publishing Inc., Canwest LP, Canwest (Canada) Inc. and Canwest Books Inc., which will make Postmedia Canada's largest publisher of paid English daily newspapers, according to a Postmedia news release.

Postmedia said the transaction also gives it a stable of community-based publications and online assets.

Specifically, Postmedia said its Postmedia Network Inc. principal operating subsidiary secured $935 million of committed financing consisting of $685 million of senior funded debt and C$250 million in equity, which will be used to purchase substantially all of the financial and operating assets of Canwest Publishing, Canwest LP, Canwest (Canada) and Canwest Books.

The purchase also includes all shares of National Post Inc., in accordance with Canwest's Companies' Creditors Arrange Act plan of compromise.

Postmedia said the debt financing will include a $300 million and C$110 million senior term loan facility and a $275 million high-yield bond issuance.

In addition to cash on hand, Postmedia Network Inc. has arranged a C$60 million asset-backed revolving line of credit for general corporate purposes.

"It has been a long journey to get to this day and now we begin the work of transforming from a traditional media company to a fully integrated multi-media company with a new brand, a refocused strategy and a determination to be at the forefront of industry change," Postmedia president and chief executive officer Paul Godfrey said in the release.

According to the release, Canwest's plan was implemented on Tuesday.

As previously reported, Canwest received court approval in May to sell substantially all of the assets and business operations of the LP entities and the shares of National Post Inc. to an entity sponsored by the members of an informal committee of 9¼% senior subordinated noteholders.

The purchase price is $1.1 billion.

Canwest's plan includes a $250 million total equity commitment by the noteholder committee for shares in Postmedia Network.

Affected creditors of Canwest Publishing with proven claims against the LP entities will receive 13 million shares of Postmedia Network, and affected Canwest Publishing creditors with claims of less than $1,000 will be paid in full.

Postmedia Network said it intends to apply for the listing of its shares on the Toronto Stock Exchange, although that application has not yet been made.

Canwest is a Winnipeg, Man.-based media company that filed for Chapter 15 bankruptcy on Oct. 6, 2009 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 15 case number is 09-15994.

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