CanWest creditors cut company's debt level

Lenders to CanWest Global Communications Corp.'s newspaper arm cut debt levels in a planned restructuring late Thursday night, ahead of the chain's return to public markets. In a move that's expected to boost the value of shares in the national chain when it begins trading on the TSX in July, creditors agreed to cut the media company debt to $700-million from $850-million as part of a $1.1-billion recapitalization that is being supervised by an Ontario court. A group of senior creditors - mostly made up of hedge funds - was planning to bring the company back to public markets by contributing $250-million, in the form of $150-million of mezzanine debt and $100-million of equity. But negotiations that played out against weak credit market prompted a shift to a plan that sees creditors contribute $250-million for equity, and no high interest rate mezzanine debt. The move means CanWest lenders are setting up the chain with a more conservative balance sheet. The overall value of the recapitalization and the amount of cash in the deal - $950-million - does not change.