An Ontario Superior Court judge has given the green light for Canwest Global Communications Corp. to sell its newspaper division to a group of its creditors.
Justice Sarah Pepall gave the go ahead on Friday to the group led by Paul Godfrey, the president and CEO of its flagship National Post newspaper.
The court approval was one of the crucial steps for the newspaper division to emerge from restructuring.
Under the arrangement, the newspapers will sell for $1.1 billion, including $950 million in cash. The deal is expected to provide enough cash to pay off the company’s banks, which were owed about $925 million.
Earlier this week, Canwest’s unsecured creditors voted 97.36 per cent in favour of the sale.
The investors are buying a stable of papers including the Post, the Montreal Gazette, Vancouver Sun and Ottawa Citizen, alongside community newspapers and websites like Canada.com.
Canwest had previously received approval for the sale last month, but had to return to court after the buyers tweaked their bid so the papers would emerge from restructuring with a smaller debt load.
The company said it hopes to complete the transaction by July 14, and then emerge as a new publicly traded company on the stock market.
The hearing Friday also extended Canwest’s newspapers court protection from creditors until the end of the year, hinged on the completion of the sale transaction by July 30.
