will lighten a crippling debt load for one of the partners, Postmedia Network Canada Corp., but industry experts say the union would do little to address the media companies’ structural challenges., which is making interest payments on its $288-million in debt by borrowing more money from hedge fund lenders, is in talks to combine forces with Torstar owner Nordstar Capital LP. Postmedia owns 130 properties, including papers in most major Canadian cities, while Nordstar owns about 70 titles.
New Jersey-based hedge fund Chatham Asset Management LLC will swap almost all of its $262-million in loans to Postmedia for equity in the combined companies, according to two sources familiar with the terms of the proposed transaction. The Globe and Mail agreed not to name the sources because they are not authorized to speak for the companies.
Postmedia also owes $26-million to Toronto-based asset manager Canso Investment Counsel Ltd. and the sources said this loan will be paid down by the combined companies. Postmedia’s track record does not inspire confidence that a merger with Nordstar’s newspaper properties will reverse these trends, said Dwayne Winseck, a journalism and communications professor at Carleton University. “Postmedia has now had a run at this since 2010,” he said, referring to the company’s formation out of the bankruptcy of Canwest Global Communications Corp. “The Postmedia properties have gone from being a venerable publishing group to being decimated.