Here’s a story I haven’t seen in the Sun or Province: Canwest shares now ‘worthless’. What happened? How have the mighty fallen so far and so quickly? Where they too reliant on real estate advertising for income or is this a larger problem?
Last week, Canwest posted a net loss of C$1.44 billion for the three months ended February 28. This included a C$1.19 billion writedown related mostly to its publishing operations.
“We see no compelling reason to own, let alone buy Canwest shares, which we would continue to avoid,” National Bank Financial analyst Adam Shine wrote in a note.
Analysts have previously said that Canwest could file for bankruptcy protection, but the company thus far has continued to negotiate with creditors rather than involve the courts.
“We continue to believe there is significant risk Canwest is forced into bankruptcy protection or to sell assets at unfavorable prices or a massive debt restructuring,” GMP Securities analyst Jason Jacobson wrote to clients.
“Either way, we believe Canwest equity value is very limited.” His target price on the shares is zero.
A Canwest spokesman had no comment on the status of the creditor talks on Monday.
Read the full article here.