A restructuring firm says several bidders have offered to buy all or part of SaltWire Network Inc. and The Halifax Herald Ltd., the two bankrupt companies that operate Atlantic Canada’s largest newspaper enterprise.
Toronto-based KSV Restructuring Inc. said in a report filed Friday that if some of those non-binding proposals are accepted, they would enable highly indebted companies to continue operating as viable businesses.
“As of the bidding deadline, a number of indicative non-binding letters of intent were submitted from interested parties to acquire all or part of the media companies’ businesses and assets, including offers that, if completed If we go, the business will continue to grow – grounds for concern,” says the KSV report.
The one-page report did not say how many bids were received by Thursday’s preliminary bid deadline, and it did not provide any details about who submitted the bids.
KSV says so-called teaser letters and non-disclosure agreements advising of the sale process were sent to more than 250 potential buyers and potential investors.
Mark Lever, SaltWire’s former chairman and CEO, has said he planned to submit a bid. Court documents show that SaltWire and its related companies are owned through separate family trusts by Lever and his wife, Sarah Dennis, who each own a 50 percent stake in the private businesses.
The next step for KSV is to conduct a due diligence process that will determine which bidders will be asked to submit binding offers by 5pm on May 24, which could lead to court approval for the transaction before June 28. And there may be an anticipated completion deadline. Of 31st July.
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Halifax-based companies own daily newspapers in Nova Scotia, Prince Edward Island and Newfoundland and Labrador, including the Chronicle Herald of Halifax, the Cape Breton Post in Sydney, NS, the Telegram in St. John’s and the Guardian in Charlottetown. He also has several digital publications.
Media companies employ approximately 800 independent contractors and 390 employees, including approximately 108 unionized positions.
Last week, KSV released another report confirming that the media companies had met with representatives from the offices of premiers in Nova Scotia, PEI and Newfoundland and Labrador to discuss “restructuring proceedings.”
Also, KSV said media companies had cut some jobs and ended its contract with international news agency Thomson Reuters. Bids have also been received for some properties owned by SaltWire, including a building in St. John’s, NL, two buildings in Nova Scotia – one in Yarmouth, the other in Sydney – and a printing plant in the Halifax area.
On March 11, a private equity firm filed court documents to initiate bankruptcy proceedings against Saltwire, The Herald, and their related companies. Fiera Private Debt claims the company owes SaltWire and The Herald $32 million after years of mismanagement.
Two days later, a Nova Scotia Supreme Court judge granted protection from creditors worth approximately $90 million to the media companies and their subsidiaries. Also, the judge appointed KSV as monitor to oversee the restructuring process under the Company Creditors Arrangement Act.
As a senior secured lender to media companies, Fiera has supported that process. Fiera loaned $500,000 to the companies on March 13 and then added another $1.5 million on March 22 to keep them afloat.
That financial arrangement will continue until May 3, at which time SaltWire and The Herald will likely apply for another extension under the CCAA. At that time, KSV says it will ask the court to extend creditor protection until June 28.
KSV says, “The main objective of these CCAA proceedings is to create a stable environment to enable companies, particularly media companies, to secure financing to continue operations while they restructure or sell their businesses and assets. Taking it forward.” A report dated 23 April.
This report by The Canadian Press was first published April 27, 2024.
© 2024 The Canadian Press