Corus Entertainment, a major buyer of U.S. series from major Hollywood studio suppliers, is one step closer to completing a recapitalization plan to stay in business.
Corus, led by CEO John Gosling, announced it has received approval from the Ontario Superior Court of Justice to proceed with a debt-for-equity recapitalization plan. The capital restructuring, which proposes to exchange senior unsecured notes for shares held by the new parent, NewCo, aims to reduce Corus’ debt load by more than C$500 million (US$363 million), reduce annual interest expenses by approximately C$40 million (US$30 million), extend the debt maturity by five years and maintain access to a C$125 million (US$90.5 million) senior secured revolving credit facility.
Corus attracts Canadian prime-time television viewers with US series such as Survivor and NCIS privileges, federal Bureau of Investigation, Central Intelligence Agency and 9-1-1 Series and brands of History Channel, National Geographic, Adult Swim and Disney Channel.
Senior bondholders will own 99 per cent of the shares of the new parent company following the completion of the capital restructuring, as a result of the continued decline in linear television advertising in Canada and the company’s massive borrowings. The proposed recapitalization deal awaits further approvals by the CRTC, the country’s television and communications regulator, and the Toronto Stock Exchange.
“Coros continues to operate in the normal course of business with no changes to any obligations to its customers, suppliers, production partners, trade creditors or employees, and looks forward to completing the recapitalization transaction,” the company said in a statement.
Corus, like other Canadian TV networks, has seen advertising revenues plummet due to the pandemic and with the threat of a recession looming, while U.S. programming costs continue to rise. And increased streaming interruptions have prompted local players to chase online viewers with expensive U.S. series to keep up with Netflix, Prime Video and other U.S. streaming players that increasingly dominate the Canadian market.
Legacy Canadian networks like Corus face a greater impact from global media industry disruption because they lack the scale of major studios and U.S. networks in the battle for survival and supremacy in the evolving streaming era.
