A group of banks is poised to became owner of 23 British Columbia newspapers, including five dailies and a dozen Lower Mainland community papers.

Canwest L.P., the newspaper chain formerly owned by Canwest Global Communications, was placed under creditor protection today and is expected to be for sale within a week.

Scotiabank is the is the lead agent among 185 senior secured lenders, who are owed approximately $950 million by Canwest LP. Ann DeRabbie, a Scotia Capital employee acting for "the lead agent bank for Canwest LP senior secured lenders," told The Tyee that "Canwest LP, and all of its assets, continue to function under existing managment."

The group of creditors, which includes several of Canada's largest banks, have also submitted an offer to acquire the assets of the chain in exchange for the debt owned them less a discount of $25 million.

RBC Dominion Securities has been selected to seek other bids for the newspaper group. DeRabbie said that process could take "six or seven weeks."

No Canadian newspaper company has previously expressed interest in the Canwest newspaper chain as a whole, though interest has been expressed in individual publications. Canadian law prohibits foreign media companies from buying a controlling interest in these publications.

If no other buyer emerges, the group of lenders led by Scotiabank will likely purchase the newspapers.

"In the simplest terms, the senior secured lenders will exchange a large portion of their debt for equity in a newly established Canadian company that will acquire the assets in the Canwest LP portfolio and assume certain liabilities," DeRabbie said in an email.

"Should the bid be successful, the senior secured lenders will facilitate the creation of a new Canadian company with an independent board of directors to acquire the assets and manage the business. Lenders will not be involved in the day-to-day operations of the company," DeRabbie said.

That new company will ultimately have to choose between auctioning off the chain in pieces -- selling off the B.C. community papers, for example -- or keeping the papers together.

DeRabbie said the lenders' plan is to transition to a publicly-traded company as soon as possible.

The Vancouver Sun, The Province, Victoria Times-Colonist, Nanaimo Daily News and Port Alberni Valley Times are among the daily newspapers expected to soon be owned by the lenders.

A dozen Lower Mainland community papers are also part of the deal. These include Abbotsford Times, Burnaby Now, Chilliwack Times, Coquitlam Now, Delta Optimist, Langley Advance, New Westminster Record, Maple Ridge/Pitt Meadows Times, North Shore News, Richmond News, Surrey Now and Vancouver Courier.

The Vancouver Island papers expected to come under control of the Toronto-based bank include Campbell River Courier Islander, Comox Valley Echo, Cowichan Valley Citizen, Harbour City Star, Oceanside Star and Tofino-Ucluelet Westerly.

Monte Paulsen reports for The Tyee.