Courtesy Toronto Globe & Mail

(February 25, 2009) CanWest Global Communications Corp. [CGS-T]has unloaded its stake in the sports specialty channel The Score, selling the shares back to the broadcaster's majority owner.

In a deal announced Tuesday night, CanWest said it was selling about 16.5 million Class A Shares in the channel to parent company, Score Media Inc. [SCR-T], for $6.62-million.

CanWest said it has also retained Genuity Capital Markets to steer the sale of the company's remaining 9 million Class A shares in Score Media. That sale, which will be done via a private placement, could bring in another $3.6-million, the company said in a statement.

In both cases, the stock is being sold for 40 cents a share, or about 25 per cent below what they are currently trading at on the Toronto Stock Exchange.

CanWest acquired a stake in the specialty broadcaster through its purchase of Alliance Atlantis in 2007, along with Goldman Sachs. It acquired more shares through a subsequent purchase in the open market later that year.

Now strapped for cash and carrying a $3.9-billion debt load, CanWest is selling non-core assets in an effort to shore up funds.

Score Media are trading at 54 cents this week. Since the stock trades in limited volumes, the shares are difficult to unload in large quantities.

CanWest's CW Media division has also agreed to convert its 4,434 special voting shares in Score Media to Class A shares, which will also be sold. If the second leg of the sale — to divest the 9-million shares in a private placement — is completed, the deals will be worth about $10-million in total.

About 84 per cent of that money will go to CanWest's CW Media division, a partnership with Goldman Sachs that holds the 13 specialty channels CanWest acquired when it bought Alliance Atlantis, including Showcase, HGTV and the Food Network. Goldman Sachs provided most of the financing for that deal, and holds an equity stake in those operations.

The remaining 16 per cent, or $1.6-million, will go to CanWest, the company said.

CanWest has spent the past few weeks looking to negotiate flexibility on its debt requirements, including reinstating a $300-million credit line that was cut back to $112-million a few weeks ago by the company's lenders. The deadline for those negotiations is Friday.

Sources have indicated that the company needs to secure a major financing deal in the coming weeks to stave off a potential filing for creditor protection. It is likely such a process would take several weeks to play out and would require an injection of at least a few hundred million dollars. CanWest chief executive officer Leonard Asper is said to be pursuing negotiations with several different lenders or investors.

Score Media is an all-sports specialty channel that launched in the 1990s broadcasting scores and text news updates. It later expanded into highlights and live sporting events, and has become a competitor to Canada's biggest sports channels, TSN, which is owned by CTV, and Rogers SportsNet.