CanWest Reports Financial Impact of Fireworks Review
16 Aprile 2004 - 11:33PM
PR Newswire (US)
CanWest Reports Financial Impact of Fireworks Review Non-cash
write-down to be recorded in second quarter WINNIPEG, April 16
/PRNewswire-FirstCall/ -- CanWest Global Communications Corp. today
reported that an internal review of Fireworks Entertainment, the
Company's program production and international distribution
operation, has been completed. This review was initiated in
response to continued and persistent weakness in demand for North
American content in international markets. Given the current state
of international film and television markets, and the likelihood of
a prolonged downturn in those markets for Fireworks' product,
Fireworks will no longer produce or acquire any new television
programs. Fireworks will continue its distribution activities,
pending the outcome of an ongoing divestiture process. Fireworks
Entertainment has taken a number of steps over the past year to
reduce its financial exposure in the face of declining demand in
international markets for its product. These steps included closure
and outsourcing of its theatrical film development, production,
acquisition and distribution activities and attendant staff
reductions. Nevertheless, it has become clear that the steps taken
to date have not been sufficient to restore Fireworks to
profitability and ensure its long-term viability. Fireworks is
actively pursuing the sale of its film and television library and
distribution operations, and is in discussion with a number of
parties. Accordingly, in its results for the second quarter and six
months ended February 29, 2004, to be released April 21, 2004, the
Company will report charges reflecting the revaluation of the
Company's investment in Fireworks and the value of Fireworks'
library, as well as amounts relating to the decision to discontinue
Fireworks' operations. These charges, which are non- cash in
nature, will total approximately $200 million. In future reporting,
results of Fireworks will be segregated from results of continuing
operations and reported as discontinued operations. In commenting
on the announcement, Leonard Asper, CanWest's President and Chief
Executive Officer, expressed his disappointment with this outcome,
however, "it has become clear that sound business principles could
no longer justify the Fireworks business model We believe that this
action should contribute positively in future to the Company's
improved free cash flow and further debt reduction. Global
Television will continue to be active in support of Canadian
production, including high quality series such as Wild Card and
Strange Days at Blake Holesy High." This news release contains
comments or forward-looking statements that are based largely on
the Company's current expectations and are subject to certain
risks, trends and uncertainties. These factors could cause actual
future performance to vary materially from current expectations.
The Company may not update or revise any forward-looking statements
or comments, whether as a result of new information, future events
or otherwise. CanWest Global Communications Corp. (NYSE: CWG; TSX:
CGS.S and CGS.A, http://www.canwestglobal.com/) is an international
media company. CanWest, Canada's largest publisher of daily
newspapers, owns, operates and/or holds substantial interests in
newspapers, conventional television, out-of-home advertising,
specialty cable channels, Web sites and radio networks in Canada,
New Zealand, Australia, Ireland and the United Kingdom. DATASOURCE:
CanWest Global Communications Corp. CONTACT: John Maguire, Chief
Financial Officer, Telephone: 204-956-2025, Fax: 204-947-9841;
Geoffrey Elliot, Vice President, Corporate Affairs, Telephone:
204-956-2025, Fax: 204-947-9841
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