Toronto-based Postmedia Network Inc. has offered to purchase Atlantic Canada’s largest newspaper chain for $1 million, according to a newly released monitor’s report.
The offer is being recommended by KSV Restructuring Inc., the court-appointed monitor overseeing the insolvency proceedings involving SaltWire Network Inc. and the Halifax Herald Ltd.
In March, the two insolvent media companies were granted court-ordered protection from creditors who were owed more than $90 million.
KSV said four offers were made for the companies but Postmedia’s bid was considered “superior to the others.”
“It provides a platform to maintain journalism in Atlantic Canada and preserves employment for certain of the Media Companies’ (SaltWire) employees,” the report states. “Postmedia is believed to be well-positioned to capitalize on the synergies required to make the media companies’ business successful in the long term.”
Under the plan, Postmedia — owner of the National Post, Vancouver Sun, Calgary Herald and dozens of other publications — will create a limited partnership for the purchase, in which it will be sole limited partner and sole shareholder of the general partner. Postmedia will also make future payments for accrued liabilities.
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The senior secured lender, Fiera Capital, has said SaltWire and The Herald together owe it $32.7 million.
The report says Postmedia is looking to close the deal by Aug. 24, and the offer is scheduled to be presented to a Nova Scotia Supreme Court judge for approval on Thursday.
The Halifax Herald Ltd. owns The Chronicle Herald, an independent daily newspaper that was founded almost 200 years ago. In 2017, the owners of the Herald created SaltWire Network Inc., which bought more than two dozen newspapers including the Cape Breton Post in Sydney, N.S.; the Guardian in Charlottetown; and the Telegram in St. John’s, N.L.
According to the report, Halifax Herald Ltd. and SaltWire Network Inc. have 363 employees.
Under Postmedia’s offer, the collective agreements with the Herald editorial bargaining unit and the Cape Breton Post bargaining unit will be “modified or amended on such terms and conditions that are satisfactory to Postmedia.”
“On or after Aug. 8, 2024, those employees not retained by Postmedia upon closing will either be terminated or they will be offered an opportunity to continue their employment … for an interim period,” the report says.
The monitor says that if the Postmedia sale isn’t realized the newspaper chain would likely be “immediately wound down.”
“This would result in job losses and Atlantic Canada’s largest media business would come to an end,” the report says.
Meanwhile, the monitor is also recommending that the creditor protection that was set to end on Aug. 9 be extended until Dec. 13., while Fiera is prepared to increase its interim financing to $7 million. “The companies are continuing to act in good faith and with due diligence to advance their restructuring,” the report says.
© 2024 The Canadian Press
