Special board committee oversees review of Postmedias strategic options

TORONTO – Postmedia Network Canada Corp.’s board has created a special committee to oversee a review of the media conglomerate’s strategic options amid what CEO Paul Godfrey called “an unrelentingly challenging environment.”The company reported another big loss in its second quarter Thursday.“There’s no doubt that we continue to see similar challenges as our industry competitors, both traditional and new players,” Godfrey said Thursday on a conference call with investors.The Toronto-based company (TSX:PNC.A) says the review could recommend options like a sale of non-core assets, cost reductions or a refinancing.Executives declined to comment during the call with investors on anything pertaining to the possibility of another strategic route for the company’s capital structure. The company does not intend to disclose more information on the process until the review is complete, according to a statement, or until it’s required to do so by law.The company is already looking to trim millions of dollars more from operating costs by mid-2017 as it reported a $225.1-million loss in its second quarter.The bulk of the loss was related to non-cash accounting items, plus a $63.8-million increase in operating expenses, primarily related to its acquisition of the Sun Media business from Quebecor (TSX:QBR.B).The owner of the National Post, Toronto Sun, Ottawa Citizen and numerous other daily newspapers says its revenue for the quarter was $209 million — up $63.6 million from a year earlier due to the addition of Sun Media.Excluding the acquisition, Postmedia’s revenue would have been $126.4 million — down 13.1 per cent or $19.1 million from a year earlier.The drop was a result of a $13.8-million decrease in print advertising revenue, largely from the automotive sector, as well as declines in print circulation and digital revenue.But Godfrey believes Postmedia has made some “strategic moves” to leverage its strengths that can help it “successfully monetize in an evolving environment.”In January, Mogo Finance Technology Inc. signed a three-year deal for a minimum of $50 million of promotions commitments from the media conglomerate. In exchange, Postmedia will receive a percentage of Mogo’s revenue and rights to buy stock in the company.Godfrey said he believes Postmedia can replicate this type of arrangement with other companies.In the meantime, it remains committed to trimming $80 million in costs by mid-2017 — a goal the company will certainly reach in the first half of that fiscal year, said chief financial officer Doug Lamb.Measures initiated over the last quarter are expected to result in $23 million of cost savings.These mostly came from the merger of newsrooms in multiple cities where the company owns two papers in each market, Lamb said. Ninety employees lost their jobs at the time of the mergers.Postmedia also consolidated some printing and fine-tuned distribution in the past quarter. Since the company announced its cost-cutting goal in July 2015 — when it was initially $50 million — it has cut $55 million.While the goal remains to trim another $25 million, the company is always assessing whether to increase that number, Lamb said.Postmedia’s long-term debt stands at nearly $650 million. Next year, more than $300 million of that debt matures.The company’s largest shareholder, GoldenTree Asset Management LP — which owns more than half the company’s variable voting shares and a portion of its debt — has been looking for buyers for its stake.The Catalyst Capital Group Inc. was approached about a potential purchase, but was not interested, a spokesperson confirmed to The Canadian Press in March.Meanwhile, the company announced Thursday that GoldenTree partner Ted Lodge had resigned from Postmedia’s board of directors. GoldenTree is permitted to nominate one member to sit on the board but Postmedia said it does not plan to fill the vacancy.GoldenTree did not immediately return a request for comment.———Follow @AleksSagan on Twitter Special board committee oversees review of Postmedia’s strategic options by Aleksandra Sagan, The Canadian Press Posted Apr 7, 2016 11:38 am MDT Last Updated Apr 7, 2016 at 3:38 pm MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email read more

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