Pedestrians walk past a Ottawa Citizen newspaper box in downtown Ottawa.Sean Kilpatrick
The newspapers owned by CanWest Global Communications Corp. have received approval from creditors on a plan to emerge from restructuring.
The company's unsecured creditors met in downtown Toronto on Monday morning, and an overwhelming majority voted for the plan: 97.36 per cent of the votes cast were in favour.
"This is a significant step in terms of clearing another hurdle and taking another step toward emergence," said CanWest spokesman John Douglas.
Last week, in preparation for the meeting, the plan for the newspaper division was modified so that the new company would emerge from creditor protection with less debt. The bondholders who are buying the papers for $1.1-billion put more equity into the deal.
The 46 newspapers, including large dailies such as the National Post and the Montreal Gazette as well as 35 community papers, will be operated under the direction of National Post president Paul Godfrey, who will step into the CEO role. Canada's largest chain of newspapers will operate as a new public company, which is expected to begin trading in the fall.
The meeting concluded at about 11 a.m. ET on Monday. The number of votes cast by creditors depended on the value of their claims against the company; 492 votes were cast. To pass, the plan required more than 50 per cent support by number of votes, and 66 per cent of the dollar value of the claims had to be in favour. Support for the plan was 99.45 per cent by dollar value.
The next step for the newspaper division will be to seek court approval for the plan, which is likely to be granted when the company is in court this Friday, June 18. The target date for the new company to emerge from restructuring is July 14.