Postmedia completes Recapitalization Transaction under the Canada Business Corporations Act

On October 5, 2016, Postmedia Network Canada Corp. (“PNCC”) and Postmedia Network Inc.’s (“PNI” and together with PNCC, the “Company” or “Postmedia”) completed a recapitalization transaction pursuant to a court-approved plan of arrangement under the Canada Business Corporations Act. The recapitalization involved the restructuring of over $600 million of PNI’s existing debt obligations, which included the following principal terms:

• the 8.25% senior secured notes issued by PNI due August 2017 were extended by approximately four years to July 2021 and reduced to C$225 million as a result of an immediate cash pay down of approximately C$78 million;
• the 12.50% senior secured notes issued by PNI due July 2018 in the aggregate amount of approximately US$268.6 million were exchanged for approximately 98% of the total number of shares of PNCC;
• approximately US$84.4 million of new capital was invested in the form of new U.S. dollar denominated second lien secured notes due July 2023 with no cash interest for the first three years, subject to certain conditions; and
• obligations to employees, customers and suppliers were not affected.

The Company’s total debt was reduced by approximately C$307 million and its annual cash interest expense was reduced by approximately C$50 million. 

Osler, Hoskin & Harcourt LLP represented the Ad Hoc Committee of Second Lien Noteholders with a team that included Marc Wasserman and Martino Calvaruso (restructuring), Kevin Morley and Joshua Lam (banking), Don Gilchrist and Rob Lando (corporate), Firoz Ahmed and Greg Wylie (tax), Michelle Lally (competition) and Jeremy Dacks (litigation).