Shares of Canwest Global Communications Corp, Canada's biggest media company, jumped more than 75 percent on Thursday after it announced it would sell its stake in Australia's Network Ten television network for more than C$630 million ($578 million).
Canwest said proceeds from the sale of roughly 50 percent of Network Ten will be used to pay down debt. Canwest is struggling under a debtload of about C$4 billion and has been in talks with lenders about restructuring its balance sheet.
Part of those talks has been a pledge by Canwest to shed non-core assets as a means of raising money. The long-rumored Network Ten sale comes while the Australian dollar is at its highest level in about a year, meaning Canwest would benefit from currency appreciation.
Shares of Winnipeg, Manitoba-based Canwest shot up 9.5 Canadian cents to 22 Canadian cents on the Toronto Stock Exchange on Thursday morning.
Canwest, which is controlled by the Asper family of Winnipeg, owns Canada's Global television network and a chain of daily newspapers anchored by the National Post.
Some of Canwest's overall debt dates back to its 2000 acquisition of newspapers from former press baron Conrad Black's Hollinger International in a deal worth C$3.2 billion.
The acquisition made Canwest the country's biggest publisher of daily newspapers. It included 13 big-city dailies as well as 126 community newspapers, Internet assets and a 50 percent stake in the National Post. The company later bought full control of the Post.
In 2007, Canwest expanded its television holdings by partnering with an affiliate of U.S. investment bank Goldman Sachs to buy specialty-TV group Alliance Atlantis Communications for C$2.3 billion.
Deadlines in Canwest's creditor talks have been extended repeatedly. Analysts have said the company could file for bankruptcy protection, but it has not involved the courts thus far.
The recession has severely depressed the advertising market, which is the lifeblood of Canwest's stable of newspapers and TV stations.
(Reporting by Wojtek Dabrowski; editing by Rob Wilson)