Canwest gets 2-week extension from lenders

Cash-strapped Canwest Global Communications Corp. said Tuesday it had reached a deal with some of its lenders to extend a waiver of certain borrowing conditions by another two weeks, until April 21.

Canwest also said its senior lenders have to provide the company access to more credit during the two-week period.

"Based on current cash flow projections, the company believes that it will have sufficient liquidity to continue to operate normally through the period," Canwest said in a release.

Next up for the company is an April 14 deadline to make a $30.4-million US interest payment that was originally due on March 15.  

If the company does not make that deadline, lenders can demand repayment of about $761 US million in outstanding debt, as well as the missed interest payment and any default interest.

Canwest, which owns a chain of daily newspapers across the country as well as Global Television, the E! network and other media holdings, said based on current cash flow projections, it will be able to operate normally as it prepares for April 14.

Canwest 'doing the right things' for the future: Asper

In a note to staff, Canwest chief executive Leonard Asper said the talks with the company's lenders and bondholders have been positive, but the company needs more time to complete a plan to recapitalize the firm.

"Inside the company, I believe that we are doing the right things to position ourselves for the future," Asper wrote in the note.

"We continue to lead the industry in a number of areas, including audience growth. Measures that we have taken to reduce operating expenses could — over the course of [the] year — reduce our costs by up to $100 million in our Canadian operations."

Canwest has about $3.9 billion in debt, and analysts suggest the company could be forced to break up its assets and sell off major operations.

Canwest shares closed unchanged Tuesday at 29 cents on the Toronto Stock Exchange.