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Canwest skips loan payment

VANCOUVER - Canwest Global Communications announced today it will not make a $10-million debt payment, putting the company’s newspaper subsidiary in default position.

The media conglomerate said it expects to breach debt covenants by Sunday.

The Canwest Limited Partnership subsidiary owns and operates 12 major daily newspapers, 26 community papers and 80 Internet operations.

In a press release, the Winnipeg-based company said the payment postponement will allow operations of the subsidiary to continue:

The deferral of these payments is intended to provide the Limited Partnership with the ability to continue to operate its business in the ordinary course, as it works to effect a recapitalization transaction.

Canwest acknowledged that the default could allow lenders to require immediate repayment of the company's debt, but said managers are meeting with lenders to negotiate funding commitments.

In British Columbia, the Canwest Limited Partnership subsidiary controls the Vancouver-based Sun and Province newspapers, the Victoria Times Colonist, dailies in Port Alberni and Nanaimo and a number of weekly community newspapers on Vancouver Island and throughout the Lower Mainland.

Garrett Zehr reports for The Tyee.

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