Toronto-based Corus, which owns Global News as well as dozens of television and radio stations across Canada, has until Sept. 1 to negotiate some form of debt relief with its lenders. Otherwise, the companyMonday, Corus may no longer be able to meet its debt commitments, which “may cast significant doubt about the company’s ability to continue as a going concern.”
“Management will need to come out with a much more aggressive cost-cutting drive in order to remain onside” with its lenders, Bank of Nova Scotia analyst Maher Yaghi said in a Monday morning note to clients. “We expect Corus to push further deep cuts in order to protect the balance sheet.” In a conference call with analysts on Monday morning, John Gossling, the company’s chief financial officer and co-chief executive officer, acknowledged “things are very tight and we are going to have to deal with it.” He said the company exceeded the 4.25 ratio by the end of its third quarter, putting it on a course to default, though he did not specify the exact size of the disparity.
Corus will continue to hold the rights to the Canadian content featured on the Warner channels that will be going to Rogers, Mr. Reeb said. In HGTV Canada’s latest broadcast year, for example, he said 12 of the top 20 shows were Canadian originals like Property Brothers “and all of them will be staying right where they are with Corus.”