Achi news desk-
HALIFAX –
A Nova Scotia judge approved a process Monday aimed at finding buyers or investors willing to bid on SaltWire Network Inc. and The Halifax Herald Ltd., the two companies that operate Atlantic Canada’s largest newspaper enterprise.
Earlier this month, Nova Scotia Supreme Court Justice John Keith granted insolvent companies protection from creditors owed about $90 million.
On Monday, Keith approved a so-called sale and investment solicitation process (SISP), which involves canvassing the market for people willing to buy or invest in some or all of the business operations and assets of the highly indebted companies.
The result could include the restructuring or recapitalization of the companies with the aim of ensuring that they continue as viable businesses, as outlined under the Companies Creditors Arrangements Act.
“Public interest is clearly a consideration given the important nature of these businesses, but this SISP offers the opportunity to renew these media companies and … the public service they provide,” he said. Keith at court when he approved the process.
The deadline for non-binding letters of interest is April 24. Qualified binding offers must be submitted by May 24. There is a June 28 deadline for the judge to approve any deals, with a deadline set for July 31 .
Meanwhile, SaltWire and The Herald can continue to operate under the CCAA until May 3, at which point they will likely apply for another extension of court-ordered protection from their creditors, first granted on March 13 .
The media companies employ approximately 800 independent contractors and 390 employees, which includes approximately 108 unionized positions.
Meanwhile, Keith confirmed Monday that a related company, Titan Security and Investigation Inc., will be put up for sale through a separate SISP. The profitable security and healthcare services company has approximately 100 full-time and part-time employees.
Last week, the judge approved a proposal by SaltWire-Herald’s senior secured creditor, Fiera Private Debt, to loan the companies $1.5 million to keep them operating. Fiera is owed more than $32.7 million, but has chosen to work on restructuring or selling the businesses instead of forcing them into receivership.
Fiera loaned $500,000 to the companies on March 13 when Keith first granted them protection from creditors.
On the other end, former SaltWire president and CEO Mark Lever has said he intends to submit an offer, although it remains unclear what he might offer for it. Court documents show Lever and his wife Sarah Dennis own SaltWire and its affiliates through separate family trusts, each with a 50 percent stake in the businesses.
That has raised concerns about potential conflicts of interest, which is why Keith has also approved additional powers to the monitor overseeing the CCAA’s transactions, KSV Restructuring Inc., and to chief restructuring officer David Boyd, who is essentially runs the SaltWire-Herald. operation.
On Monday, Keith said the changes reflected “concern about conflict and contamination of the process.”
Last fall, SaltWire companies, with the help of FTI Capital Advisors, encouraged interested bidders to participate in a recapitalization process through an earlier SISP.
“That process has not yet resulted in a transaction, although many parties have expressed, and continue to express, interest in the opportunity,” KSV Restructuring said in a recent monitor report.
“A letter of intent was recently received, and discussions are continuing with that party.”
This report was first published by The Canadian Press on March 25, 2024.
