CanWest Global Communications Corp. has announced it will be transferring the National Post newspaper to its publishing division.
In a statement released late Tuesday, CanWest said that under the terms of the agreement, all National Post employees will be offered employment with the new company.
It will also assume the newspaper's obligations and liabilities under the National Post's pension plan.
But CanWest still needs to get court and senior lender approval to have its 11-year-old national newspaper transferred from its holding company, CanWest Media, to CanWest Limited Partnership.
The deadline for the planned transfer of the National Post to CanWest Limited Partnership is this Friday, when CanWest is scheduled to appear in court.
In a story published on the National Post's website, the newspaper's publisher Gordon Fisher says the move will bring the Post stability and strengthen its operations.
The announcement comes amid speculation that CanWest, which is seeking court protection from its creditors, is preparing to sell its newspaper division.
Industry analysts say CanWest could fetch more than $1-billion for its newspaper assets as signs of life in the finances of the newspaper industry drive up interest in acquisitions.
One analyst, who asked to remain anonymous, has said that the National Post is considered a money-loser and that CanWest would want to lump it in with other more profitable papers in order to get it sold.
Chris Diceman, an analyst at Dominion Bond Ratings Service, believes if CanWest does go ahead with the rumoured plans, the company could pull in between $600-million and $900-million for the lumped together assets in a first round of bids.
"If there was a bidding war for these assets either in, or part of, creditor protection, that multiple may go up even higher than that," he said recently.
Winnipeg-based CanWest has amassed nearly $4-billion in debt.
Most of that comes from the purchase of Conrad Black's newspaper assets in 2000 and the group of specialty channels from Alliance Atlantis in 2007.
CanWest tried to avoid creditor protection by selling off its lesser assets earlier this year, while keeping its most prized divisions.
Gone are U.S. political magazine the New Republic and its E!-branded television stations, as well as European radio stations.
But expectations are that CanWest will have to sell more of its remaining assets in the restructuring process, and the newspapers are expected to be the next to go.