CanWest Global Communications Corp. CEO Leonard Asper spoke to The Globe and Mail's Grant Robertson after the company's decision to file for bankruptcy protection. Some excerpts:
Q: What do see emerging from this court-monitored restructuring process?
Leonard Asper: "We've got a controlled restructuring going on, it's got the support of the creditors. A lot of this is process that we have to go through. We're going to have to raise some additional equity, to get CRTC approval, get the court approval, which because we have over 70 per cent of the creditor group on side is a very likely thing. And we drive forward. Within several months, we're out [of the process]and operating with a company that is a lot leaner, without the debt that we've had over the last number of years. And stronger with the continuing underlying operating profits that we have. So we'll have the operating profits without the debt, and I think we'll be a stronger company."
Q: Why do this now, as opposed to several months ago when the debt problems first arose?
Leonard Asper: "I think it's that these things took time to negotiate. One of the things we spent a lot of time negotiating was first and foremost to minimize the impact on employees and other stakeholders. And so there will be very minimal impact on this whole group of people that are affected by this. There will be some and I am regretful but we fought hard to make sure that employees in particular were treated as well as possible. And I think the action we took in Australia [to sell CanWest's TV network there]to reduce the balance sheet issues … we had planned to sell Australia potentially during a filing. But we decided to sell it before the filing so that delayed things by a few weeks. These things take time there are multiple parties, the bondholders are not one group. We just wanted to make sure the cash situation ended up being as good as it ended up being, that took some time to negotiate. Once we sold Australia it all came together."
Q: Why has the Asper family offered to put $15-million into the restructuring? Are you trying to get a bigger seat at the table?
Leonard Asper: "Don't forget the business has to be owned by Canadians… So subject to certain conditions being met, we're certainly willing to put our capital into the company. We believe in the prospects going forward. So we are happy to be part of it, and we've made a deal in principal with the bondholders but we have to bring in the third party, the additional equity which we will do in conjunction with the company and the noteholders to ensure that the entire equity is spoken for."
Q: Who is the new third party investor that will be brought in to CanWest in the restructuring?
Leonard Asper: "A lot of people have expressed interest. We held them back for now until we got this process started. Now that we've got the orderly restructuring plan set up we will now go to the next stage, which is find the equity, go to the CRTC, put together the plan of the arrangement and the recapitalization, have the vote on it and emerge.
Q: Is there any worry you might get squeezed out by the new investor?
Leonard Asper: "I can't speculate on that. We want to bring in a partner that's obviously compatible with us and the company wants to ensure it gets the best deal possible for it. … But I don't think I can speculate on who that party might be and what they may want as part of their investment.
Q: What is your future as CEO ?
Leonard Asper: "I'm not focused on that right now. I've got a job to do right now which is to lead a restructuring, the stakeholders on both sides, whether it's the board or the note holders have agreed to that and they've in fact been very supportive of it. So that's what's going to happen over the next four to six months while we're in the process. I've got to focus on that job and not worry about Leonard Asper, we've got a job to do and make sure we protect the value. I've got to make sure the advertising and programming all happens on a business as usual basis, and make sure I communicate with the employees and do my job.
Q: Is it your call to stick around ?
Leonard Asper: "I don't know what timeframe you are talking about. Certainly in the restructuring, the next four to six months, the stakeholders have agreed its status quo and they've got full confidence that the current management team is the best one to lead this through. One of the reasons they wanted to convert their debt to equity is because this is a good business. And it's got very good prospects and it's got a very successful strategy. It's got a balance sheet problem and that is being fixed, but the underlying business is doing quite well.