In our group's October 2009 e-Communiqué, we reported that Nortel agreed to sell its Enterprise Solutions (business phone) division to New Jersey based Avaya Inc. for US$900 million. Since then, the Canadian government approved the sale under the Investment Canada Act and Nortel announced that it completed the sale of substantially all of the Enterprise Solutions division together with the shares of Nortel Government Solutions Incorporated and DiamondWare, Ltd. to Avaya. Certain Enterprise Solutions assets are reportedly held by Israeli Nortel subsidiaries and the sale of those assets remain subject to court approval in Israel. Avaya has reportedly committed to continue to operate Nortel's Belleville and Ottawa research and development facilities.
Also, Nortel announced that it obtained Orders from the Ontario Superior Court of Justice and the United States Bankruptcy Court for the District of Delaware approving the stalking horse asset sale agreement with Texas based GENBAND, Inc. for Nortel's North America, Caribbean and Latin America and Asia Carrier VolP and Application Solutions (CVAS) business (certain Nortel entities also entered into a separate asset sale agreement with GENBAND for Nortel's Europe, Middle East and Africa CVAS assets). The sale price is reported to be US$282 million subject to balance sheet and other adjustments estimated by Nortel at approximately US$100 million. The Orders established bidding procedures with offers to be submitted by February 23, 2010 and an auction currently scheduled for February 25, 2010 (after which the sale will require final court approval).
In our group's October 2009 e-Communiqué, we reported that Canwest Global Communications Corp. and certain of its subsidiaries successfully filed under the CCAA in Ontario in connection with Canwest's television business and which included Global Television and such specialty channels as DejaView, Fox Sports World and MovieTime.
On January 8, 2010, Canwest Limited Partnership and certain of its subsidiaries successfully filed under the CCAA in Ontario (with reasons). The filing applies to Canwest Limited, Canwest Publishing Inc., Canwest Books Inc. and Canwest (Canada) Inc. and includes all of Canwest's newspaper publishing and associated digital media, online and mobile operations except for National Post Inc. and its associated operations. Canwest's secured creditors include Canada's five largest banks and lenders worldwide. DIP financing up to $25 million was obtained from certain Canwest senior secured lenders. A sale and investor solicitation process has been initiated to obtain expressions of interest in connection with a potential sale of all of the assets of (or an equity investment in) the filing Canwest entities and National Post Inc. (although National Post Inc. and its assets are not part of the CCAA filing). As reported by Canwest, the filing is to implement a pre-packaged restructuring plan supported by more than 48% of Canwest Limited's senior secured debt holders. The plan includes an agreement that, if a cash offer does not emerge from the seven week sale process that is greater than the amount of the debt owing to the senior secured lenders, a new company incorporated by the senior secured lenders will acquire (subject to certain exceptions) substantially all of these Canwest assets. The debt owing to the senior secured lenders will be transferred to the new company in exchange for debt and equity in the new company. On completion of the transfer to the new company, the senior secured debt (less a "discount" of $25 million) will be deemed to have been satisfied. The $25 million discount will constitute an outstanding unsecured claim of the new company against these Canwest assets. The senior secured lenders are reportedly owed $940 million. The $25 million discount offered by the senior secured lenders means that the sale process would likely have to result in a cash sale price of at least $915 million or the senior secured lenders will proceed with the transfer under the restructuring plan.
In our group's December 2009 e-Communiqué, we reported that Big Sky Farms Inc. successfully filed under the CCAA in Saskatchewan. On December 18, 2009, Big Sky obtained an Order from the Queen's Bench Judicial Centre of Saskatoon requesting the assistance of the United States Bankruptcy Court for the Northern District of Iowa in connection with liens by certain creditors over Big Sky livestock in Iowa. The Order also requested the Iowa Court recognize and apply the Guidelines Applicable to Court-to-Court Communications in Cross-Border Cases. The Order is significant as it represents one of the few (if not the first) orders of its kind between Courts in Saskatchewan and Iowa.
On December 23, 2009, TLC Vision Corp. announced it successfully filed in Delaware under Chapter 11 of the US Bankruptcy Code together with its subsidiaries TLC Vision (USA) Corporation and TLC Management Services Inc. TLC announced that it reached an agreement with a majority of its senior secured lenders and that it will convert some of its debt into 100% of the new equity of TLC which will emerge as privately held TLC Vision (USA) Corp. As part of the pre-arranged reorganization plan, TLC is to obtain $15 million in DIP financing. In Canada, TLC obtained a recognition order from the Ontario Superior Court of Justice in connection with its filing in Delaware. TLC operates the TLC Laser Eye Centres and has corporate offices in Mississauga, Ontario and Chesterfield, Missouri.