Canwest given another week to make $30.4M US interest payment

Canwest Global Communications Corp. said Tuesday that its Canwest Media Inc. subsidiary has been given another extension to make a $30.4-million US interest payment on its debt.

The deadline for the payment, which had been Tuesday, was extended to April 21. The amount was originally due on March 15.

Without the extensions, the holders of Winnipeg-based Canwest's senior subordinated notes could demand repayment of about $761 million US in outstanding principal, as well as the missed interest payment and any default interest.

The company said it reached the extension agreement with members of an ad hoc committee of noteholders who hold approximately 70 per cent of the outstanding debt.

Under the terms of the deal, the noteholders have agreed not to demand payment of their notes until April 21.

Last week, another group of Canwest's lenders agreed to extend a waiver of certain borrowing conditions by a further two weeks, until April 21.

The company has received several extensions on its repayment deadlines, partly because it has shown lenders that it's struggling to sell off non-core assets in a difficult environment.

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.

Last week, it reported a net loss of $1.44 billion in its latest quarter, including a $1.19-billion writedown of assets, mostly in its newspapers.

Earlier Tuesday, Moody's Investors Service downgraded the rating of Canwest Media Inc. in anticipation that the subsidiary would not make the $30.4-million interest payment this week.

Canwest announced the latest extension several hours after markets had closed. The company's shares closed down two cents at 23 cents Tuesday on the Toronto Stock Exchange.