Canwest Global Communications Corp. (“Canwest” or the “Company”) announced today that agreements have been reached between Shaw Communications Inc. (“Shaw”), certain of the senior subordinated noteholders of Canwest Media Inc. (“CMI”), and Goldman Sachs Capital Partners and certain of its affiliates (together, the “Goldman Sachs Entities”) that contemplate a purchase by Shaw of all of the shares of a restructured Canwest (“Restructured Canwest”) upon completion of the proposed recapitalization transaction and a purchase by Shaw of all of the Goldman Sachs Entities’ equity and voting interests in Canwest’s subsidiary, CW Investments Co. (the “CW Media Group”).
The Company, Shaw and the members of the ad hoc committee (the “Ad Hoc Committee”) of holders of CMI’s 8% senior subordinated notes (the “8% Noteholders”) have amended the terms of the proposed recapitalization transaction involving Canwest, CMI and certain of CMI’s subsidiaries (together, the “CMI Entities”). The amended terms of the recapitalization transaction were agreed to by the parties in conjunction with an agreement between Shaw and the Goldman Sachs Entities which provides for the purchase by Shaw of all of the Goldman Sachs Entities’ equity and voting interests in the CW Media Group of specialty television channels. Shaw’s purchase is a major step towards the implementation of the financial restructuring of the CMI Entities.
The amended recapitalization transaction contemplates a purchase by Shaw of all of the shares of Restructured Canwest, as part of the proposed recapitalization transaction. Approximately US$440 million of the aggregate subscription price will be allocated to satisfy the claims of the 8% Noteholders against the CMI Entities. An additional $38 million will be allocated to satisfy the claims of the CMI Entities’ other unsecured creditors, subject to an increase for restructuring period claims in certain circumstances. The shares of Canwest held by existing shareholders will be extinguished without compensation.
The parties have executed amendments to the previously disclosed transaction agreements, being the subscription agreement between Canwest and Shaw, the related support agreement among Canwest, Shaw and members of the Ad Hoc Committee, as well as the support agreement and the use of cash collateral and consent agreement among the CMI Entities and members of the Ad Hoc Committee (together, the “Amendments”). The Amendments are the result of extensive arm’s length negotiations between the parties.
Concurrently with the execution of the Amendments, Shaw has entered into agreements with the Goldman Sachs Entities pursuant to which Shaw will acquire the Goldman Sachs Entities’ equity and voting interest in the CW Media Group for total cash consideration of $700 million and has replaced the Goldman Sachs Entities as a party to the CW Media Group shareholders agreement. Canwest, CMI, CW Media Group, Shaw and the Goldman Sachs Entities have also executed a mutual release with respect to the matters that have been the subject of litigation between the parties.
The implementation of the amended recapitalization transaction remains subject to the satisfaction of a number of conditions in favour of Shaw, the Ad Hoc Committee and the Company, including approval of the Ontario Superior Court of Justice (Commercial List) (the “Court”) as well as creditor and certain regulatory approvals. Following successful completion of the recapitalization transaction, Canwest will be de-listed from the TSX Venture Exchange and will apply to cease to be a reporting issuer under Canadian securities laws. The Company has agreed to use commercially reasonable efforts to obtain a Court sanction order with respect to the recapitalization transaction by August 27, 2010. The Amendments contemplate that the proposed recapitalization transaction will be completed by no later than September 30, 2010.
Today’s announcement relates only to Canwest’s conventional and specialty television broadcasting assets. Canwest Limited Partnership and its affiliates, the Company’s newspaper and online-publishing assets continues a separate Companies’ Creditors Arrangement Act (Canada) restructuring procedure.
More information about the restructuring of the Company and the CMI Entities can be found at www.canwest.com and on the Monitor’s website at http://cfcanada.fticonsulting.com/cmi.
Forward Looking Statements:
This news release contains certain forward-looking statements about the objectives, strategies, financial conditions, results of operations and businesses of Canwest. Statements that are not historical facts are forward-looking and are subject to important risks, uncertainties and assumptions. These statements are based on the Company’s current expectations about our business and the markets in which the Company operate, and upon various estimates and assumptions. The results or events predicted in these forward-looking statements may differ materially from actual results or events if known or unknown risks, trends or uncertainties affect the Company’s business, or if the Company’s estimates or assumptions turn out to be inaccurate. As a result, there is no assurance that the circumstances described in any forward-looking statement will materialize. Significant and reasonably foreseeable factors that could cause the Company’s results to differ materially from its current expectations are discussed in the section entitled “Risk Factors” contained in our Annual Information Form for the year ended August 31, 2009 dated November 26, 2009 filed by Canwest Global Communications Corp. with the Canadian securities commissions (available on SEDAR at www.sedar.com), as updated in its most recent Management’s Discussion and Analysis for the three month and six months ended February 28, 2010. The Company disclaims any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.
