The CRTC has approved a major debt-for-equity recapitalization plan for Corus Entertainment, transferring 99% ownership of the company to its lenders to avert further financial pressure.
The regulatory approval allows newly-created parent company, NewCo, to acquire Corus and its broadcast assets, ending control by the Shaw Family Living Trust. Under terms of the transaction, lenders will exchange approximately $500 million in debt for equity, with Richmond Hill’s Canso Investment Counsel Ltd. emerging as the single largest shareholder with roughly 44% of the voting interest. Despite Canso’s significant stake, the CRTC confirmed that no single shareholder will hold majority control, and effective control will remain with NewCo’s board of directors.
Corus currently operates 25 discretionary services, 15 conventional television stations, 36 radio stations (including six newstalk stations), and digital platforms, including Globalnews.ca.
“In the Commission’s view, the proposed transaction will help to ensure that Corus remains a part of the Canadian broadcasting system,” the CRTC stated in its decision. “The Commission notes that news services across Canada continue to face significant pressures, and considers that the continued availability of Corus’s news and information services – including those provided through its radio stations – serves the public interest.”
Corus filed its application to move forward with the plan in February as the beleaguered company found itself under a mounting $1.1 billion debt load, liquidity constraints, and a 10.3% annual decline in discretionary service revenues from 2023-25.
The plan previously received approval under the Canada Business Corporations Act, despite a vote by Class B shareholders falling short of the required numbers. That same shareholder group opposed the application, citing concerns over ownership transparency and a lack of editorial safeguards.
The regulator made its approval conditional on Corus filing amended bylaws that explicitly enforce Canadian board composition rules. Corus must also submit the names and citizenship status of the initial board of directors within 30 days of their appointment.
Exemption from tangible benefits
In a significant move, the CRTC exercised its discretion to exempt Corus from making contributions under its Tangible Benefits Policy, which typically requires buyers to pay financial levies toward Canadian content creation during ownership transfers.
While groups such as the Canada Media Fund (CMF), Writers Guild of Canada (WGC), and the Canadian Media Producers Association (CMPA) called for full or partial tangible benefit commitments, the commission agreed with Corus that extra financial burdens would defeat the purpose of the recapitalization.
Corus said the transaction is expected to close in the coming weeks, “upon satisfaction of various closing conditions and the receipt of customary securities laws and stock exchange approvals.”
“The Recapitalization Transaction is expected to strengthen Corus’ financial position and provide a long-term solution that supports a sustainable business strategy by materially reducing existing debt and maintaining secured lending facility and liquidity access,” the company said in a statement.
“Business is expected to continue as usual until and following transaction closing, with no anticipated impact to Corus’ obligations to clients, producers, suppliers or employees. Upon closing, shares issued pursuant to the transaction will trade publicly and the company will provide further details upon closing.”
