Canwest agrees to sell restructured shares to Shaw Communications

By Caroline Salls

Pittsburgh, May 3 - Canwest Global Communications Corp. has reached an agreement with Shaw Communications Inc., some of Canwest Media Inc.'s senior subordinated noteholders and Goldman Sachs Capital Partners that calls for a purchase by Shaw of all of the shares of a restructured Canwest, according to a company news release.

The share purchase would close upon completion of the company's proposed recapitalization transaction and a purchase by Shaw of all of the Goldman Sachs entities' equity and voting interests in Canwest subsidiary CW Investments Co.

Canwest, Shaw and the members of an informal committee of holders of Canwest Media's 8% senior subordinated notes have amended the terms of the proposed recapitalization transaction in conjunction with an agreement between Shaw and the Goldman Sachs entities that 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.

Canwest said Shaw's purchase is a major step toward the implementation of the financial restructuring of the Canwest Media entities.

According to the release, the amended recapitalization transaction calls for a purchase by Shaw of all of the shares of restructured Canwest.

About $440 million of the total subscription price will be allocated to satisfy the claims of the 8% noteholders and an additional $38 million will be allocated to satisfy the claims of the Canwest Media entities' other unsecured creditors, subject to an increase for restructuring period claims.

The shares of Canwest held by existing shareholders will be extinguished without compensation.

Amendments

In addition, the parties have executed amendments to previously disclosed transaction agreements, including the subscription agreement between Canwest and Shaw, the related support agreement among Canwest, Shaw and members of the informal committee, as well as the support agreement and the use of cash collateral and consent agreement among the Canwest Media entities and members of the informal committee.

Goldman Sachs deal

Along with the amendments, Canwest said Shaw has entered into agreements with the Goldman Sachs entities under which Shaw will acquire the Goldman Sachs entities' equity and voting interest in the CW Media Group for total cash consideration of $700 million.

Shaw has also replaced the Goldman Sachs entities as a party to the CW Media Group shareholders agreement.

Canwest, Canwest Media, CW Media Group, Shaw and the Goldman Sachs entities have also executed a mutual release regarding matters that have been the subject of lawsuits between the parties.

The implementation of the amended recapitalization transaction remains subject to the satisfaction of a number of conditions, including approval of the Ontario Superior Court of Justice and creditor and regulatory approvals.

Following successful completion of the recapitalization transaction, Canwest will be de-listed from the TSX Venture Exchange.

Canwest said it has agreed to try to secure a court sanction order on the recapitalization transaction by Aug. 27. Under the amendments, the proposed recapitalization transaction must be completed by Sept. 30.

Shaw hires Robertson

According to a Shaw news release, Shaw has hired Paul Robertson to take overall responsibility for Canwest, including the Canadian Television Limited Partnership and the CW Media Group subsidiaries.

Robertson's previous roles include president of Corus Television, senior vice president of programming and marketing at CTV and president of Baton Broadcast Sales.

Canwest Global 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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