Coming soon: New owners for Canwest papers
Members of Local 2000 who work for Canwest-owned papers will soon have a new employer. The sale of Canwest LP Entities — the company’s newspaper and related websites — could happen as quickly as seven weeks from now, if the process outlined in the monitor’s report of Companies’ Creditors Arrangement Act (CCAA) is followed.
According to court documents the senior secured creditors (primarily Scotiabank and four other big Canadian banks) have made an “acquisition agreement” to pay $925 million for all Canwest’s publishing assets. If their bid is successful the banks would set up a new company. Interestingly, the monitor’s report say this new company would “offer employment to all or substantially all” of current employees and promises (with a later qualification) to pay all outstanding severance and other termination payments, except for two management retirement arrangements.
Also outlined in the monitor’s report is a bidding process whereby interested parties can make a superior offer.
First there will be a seven-week process during which buyers will get to kick the tires. Then tentative offers will be made. If any are judged better than the $925 million offer already on the table, there will be a further seven-week period where the books will be completely opened to the potential buyer(s). A vote of over a third of the secured creditors can nix any of these offers at either stage.
If the banks’ offer is the best, it appears all other creditors would get nothing.
Among the rumoured interested parties with experience owning newspapers are Torstar, Quebecor, and Glacier Media. Some pundits suggest pension plans such as the Ontario Teachers’ may be interested. Joint bids are conceivable, with parties going into the deal to carve off various parts of the newspaper empire. For example, Glacier may only be interested in B.C. newspapers and participate in a joint bid to get those.
It is possible that some interested parties may contact Local 2000 to obtain our views on the efficiency of the newspapers where our members work.
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Here are some other tidbits gleaned from court documents available to download at http://cfcanada.fticonsulting.com/clp/
• Despite being in creditor protection, Canwest’s newspapers are picking up the tab for losses at the National Post.
According to court documents Canwest Publishing Inc. (CPI) is providing a loan of up to $12.5 million to the National Post to cover operating losses. The loan is due the earlier of July 26, 2010 or the date on which there is a new owner of the Post. The loan is secured by the “assets” of the National Post.
• As of Dec. 31, 2009 Canwest’s “LP Entities” had 5,300 (full-time equivalent) employees. Approximately 45% are unionized under 43 collective agreements. CEP represents 25 of the bargaining units and the CWA-Guild 12.
• Canwest Publishing Inc. has three defined benefit plans.
The main plan, CPI Retirement Plan, has a winding-up deficiency of (as of Dec. 31, 2008) of $101,904,036. The company is currently making special payments of $17,529,108 per year to make up the deficiency. The Vancouver Island Plan has a winding-up deficiency of $3,694,467 and the company is currently paying $899,344 per year to make up that deficiency.
The Windsor Star Plan has a winding-up deficiency of $751,078 and the company is currently paying $148,214 per year to make up that deficiency.
All payments continue to be made while the company is under creditor protection.
Many Canwest employees belong to defined contribution plans — including those at PNG, whose plan is jointly administered by the company and union and has a slight surplus — and the company continues to make its contributions.
• There is a “management incentive program” for 24 employees who will pay $3.4 million (half already paid out). One employee at the National Post will get $417,000. In addition Gordon Fisher and Dennis Skulsky will share $1.2 million (the proportion to each is blacked out) if their jobs are terminated.
This entry was posted on Wednesday, January 13th, 2010 at 11:32 am and is filed under Local News.
