Canadian television company Corus Entertainment Inc. is working with Jefferies Financial Group to explore a sale of its business, according to people with knowledge of the situation.
It’s doing so less than four months after warning investors that its debt issues “may cast significant doubt about the company’s ability to continue as a going concern.”
Plans are in the early stages, said the people, who asked not to be identified discussing private negotiations. Corus did not reply to requests for comment while Jefferies declined to comment.
Last week, Corus said it was halving the size of a credit line in exchange for more relaxed conditions from its lenders. The firm inked a deal with a group of banks, led by RBC Capital Markets and TD Securities, to amend and restate its senior secured credit facility. The deal involves cutting its revolving facility to C$150 million ($108 million) from C$300 million, with the ability to request advances up to C$65 million.
The company has more than C$1 billion in debt, including C$500 million in bonds maturing in 2028 and another C$250 million in notes due in 2030. A group representing the vast majority of the bondholders has tapped Canaccord Genuity Group Inc. as financial adviser and law firm Bennett Jones LLP to negotiate with the company, according to the people. Canaccord and Bennett Jones didn’t reply to requests for comment.
Corus, which owns cable television channels as well as local TV and radio stations in Canada, is controlled by the Shaw family of Alberta.
Corus shares have tumbled into penny-stock territory on growing concerns about a tough advertising market and the company’s debt load. They’ve lost more than 80% of their value this year, making Corus’ stock market capitalization around C$23 million. As recently as 2022, it was more than C$1 billion.
Some analysts have written that current shareholders may be left with nothing after a restructuring of the company, which suffered a devastating blow earlier this year when it lost some programming and trademark deals for channels owned by Warner Bros Discovery Inc. Shares of Corus closed at 11.5 Canadian cents on Friday.
Quebecor Inc. made an offer to buy Corus earlier in the year, Canada’s Globe and Mail newspaper reported in September.
