Canwest Global shares tumble to historical low on the TSX

By David Friend, The Canadian Press

TORONTO - Shares of Canwest Global Communications Corp. (TSX: CGS.TO) plummeted briefly to a historical low on Friday, following reports that the media empire could be near collapse as its CEO searches for last-minute financing.

Canwest stock was down nearly 18 per cent, or 7.5 cents, to 35 cents on the Toronto stock market after sliding as low as 33.5 cents earlier in the session.

The Globe and Mail newspaper reported Friday that chief executive Leonard Asper has until the end of the month to find enough financial support to keep the Winnipeg-based newspaper publisher and TV broadcaster from filing for bankruptcy protection.

Canwest declined to directly address the report, but issued a statement later Friday confirming it's still reviewing its options, which include selling non-core operations and assets.

"There is a very structured process that we are going through that has a number of checkpoints," the company said in an email from spokesman John Douglas.

"Getting a financial agreement with our senior banks is one of those checkpoints, as is examining non-core assets, reducing our cost structure and recapitalizing the company."

"We are currently gathering information and examining any number of options so we can make good, sound business decisions that are in the best interests of Canwest shareholders and its employees over the long term."

Canwest owes about $3.9 billion in debt and RBC Dominion Securities, its adviser, is scouring the market for financial support.

The Globe - a direct competitor of Canwest's National Post and belonging to CTVglobemedia, a larger media group that competes with Global Television - reported that potential investors want the Asper family to give up its voting control in exchange for any cash investment.

Other requirements could include Asper exiting his role as CEO and the family giving up the dual-class share structure that gives them effective control of the company.

Canwest's largest shareholder, apart from the Asper family, is Fairfax Financial Holdings Inc. (TSX: FFH.TO), which has been gradually increasing its stake in the media company over the past year.

Fairfax chairman and chief executive Prem Watsa would neither confirm nor deny reports that the firm is interested in taking Canwest's operations private.

"We can't say anything about Canwest. Our policy has always been - 23 years now - that we don't talk about our individual investments," Watsa told investors on Fairfax's quarterly earnings call on Friday.

Last December, Fairfax increased its stake in Canwest to 22.41 per cent, sparking speculation that it could be looking to buy out the company's minority shareholders.