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Postmedia Network Inc. has sold the bulk of its newspaper operations in British Columbia – including one of Canada's oldest newspapers, the Victoria Times Colonist – to Vancouver-based Glacier Media Inc. , as part of a broader strategy to pay down its debts.

The company announced the $86.5-million deal after the markets closed on Tuesday. It includes the 153-year-old Victoria paper and two other daily newspapers, as well as 20 community publications in B.C.

"We got a terrific price to pay down a considerable amount of our debt," chief executive officer Paul Godfrey said in an interview, adding that the Victoria paper's union rules were also a motivator for the sale. The collective bargaining agreement there prevents outsourcing services such as pagination, which the company does at a central facility in Hamilton, and ad production which it outsources to the Philippines.

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The deal came together when Glacier Media made "an unsolicited offer" for the papers, according to Mr. Godfrey. Digital properties associated with the papers and some real-estate listings are also included in the purchase. Glacier Media, which publishes community newspapers in 65 markets in Western Canada, is now significantly increasing its presence in B.C. It also owns a number of trade publications.

"It gives us the broadest coverage in local markets in Western Canada, so we can go to our advertisers and offer them a broader reach," Glacier chief executive officer Jonathan Kennedy said. Glacier will now focus on paying down debt, developing its properties and looking into further acquisitions. He added that the company will continue to focus on building its business information segment.

In May, Glacier bought 15 food- and agriculture-focused publications and websites from Rogers Publishing Ltd., to expand its trade publishing business. Glacier has been showing relatively steady signs of rebounding since the economic downturn; in August, it announced its second-quarter revenue was up 7.1 per cent, to $68.1-million.

The Postmedia deal includes the Nanaimo Daily News and Alberni Valley Times daily papers, plus a stable of community newspapers such as the Vancouver Courier, the Abbotsford Mission Times, and the Harbour City Star. The sale now leaves Postmedia with two major dailies in B.C., The Vancouver Sun and The Province, as well as five community newspapers in its Windsor-Essex group.

Postmedia, which emerged from creditor protection last summer, has been aggressively working to pay down its debt load, but like other print publications has had to cope with a weak economic recovery. Although its digital revenues have been rising, in July the company reported a second-quarter loss of $3.9-million, with revenues falling 4.1 per cent.

The deal is expected to close by the end of November.

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