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Leonard Asper (Sean Kilpatrick)
Leonard Asper (Sean Kilpatrick)

CanWest gets ready for new face near the top Add to ...

Plans are being made at CanWest Global Communications Corp. to bring in a senior executive who would lead a financial restructuring of the media company, possibly superseding chief executive officer Leonard Asper.

CanWest's creditors have been granted several key decision-making powers in exchange for a recent $175-million financial lifeline, including the ability to install a chief restructuring officer in the coming weeks, according to documents filed with securities regulators.

The exact role of the new executive has not been defined, but it is expected the position will be filled by the end of the month. CanWest must nominate candidates to lead the company's restructuring, from which the company's bondholders and creditors will pick.

That oversight is one of several conditions the creditors received in exchange for the loan package a few weeks ago, according to the documents.

The financing allowed CanWest to pay off its Canadian bank debt, but installed a consortium of bondholders and lender CIT Business Credit Canada as lead creditors.

CanWest has been in protracted negotiations with creditors for the past six months after a steep decline in advertising revenue made its $3.9-billion debt unmanageable.

The company has been trying to stave off filing for protection from creditors and has secured several extensions on payment deadlines as it tries to negotiate a solution.

CanWest, which owns newspapers in several major cities across the country and the Global Television network, has also agreed to several strict conditions on how the business operates on a weekly basis.

Every Thursday, the company must file a weekly cash flow report with creditors, along with detailed explanations should it miss its promised cash flow targets. CanWest also cannot issue bonuses to executives without approval of the bondholders and senior creditors, nor sell any asset worth more than $500,000.

As well, the company has also placed its stake in the Australian television network, TEN, as collateral toward the money it has borrowed. The network was once considered to be valued at around $1-billion, but has sunk to about $500-million at present market value amid the recession, which has battered the media sector.

However, the TEN network is considered one of the more liquid assets on CanWest's books, meaning the stake could be sold more quickly than other assets if necessary. As well, encouraging signs of late in the Australian advertising market have seen media stocks there rise, meaning the value of that network could increase if the trend continues.

The 300 pages of documents also detail the broad strokes of a potential filing for court protection from creditors, if necessary. However, the company and the creditors have not indicated they will necessarily go that route. The company is currently discussing options that would involve restructuring outside of court protection.

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