Corus announces recapitalization deal as it seeks relief from its debt burden

TORONTO – Corus Entertainment Inc. says it has signed a recapitalization deal that will see its debtholders take ownership of the company.

Under an agreement announced Monday, the radio and television broadcaster said $500 million of its senior notes will be exchanged for 99 per cent of the shares in the restructured company.

“The proposed transaction will solidify our financial foundation and position Corus for the long-term,” CEO John Gossling said in a press release.

Existing Corus shareholders are expected to swap their holdings for shares representing one per cent of the new company. Corus said the recapitalization deal is expected to reduce its third-party indebtedness and other liabilities of over $500 million and see annual cash interest savings of up to $40 million.

RBC analyst Drew McReynolds said in a note to clients that a restructuring has been long in the making.

“Significant ongoing structural and cyclical headwinds combined with a lack of timely regulatory support contributed to what has been a long-awaited proposed recapitalization transaction,” he said.

“While we expect these headwinds to persist, the proposed recapitalization transaction strengthens Corus’ financial position providing additional financial flexibility and a more sustainable path forward as a going concern.”

Alex Hennick, president of A.D. Hennick and Associates Inc., said typically in a situation such as this, the company is seeking to do “everything that they possibly can” to restructure and make necessary changes for a chance to return to profitability.

“To some degree, they might be running out of options. There might not be other interested parties who want to purchase it,” he said.

When a firm is struggling, Hennick said sometimes a competitor can step in with a takeover offer, but in some cases, rival firms may also be facing similar challenges and are not in a position to make a bid.

For shareholders, Hennick said the move essentially dilutes the value of their holdings.

“This is like a wipeout; 99 per cent means that their current share will retain almost no value,” he said.

“The new owners are the creditors. They’re going to be taking the equity risk, and they’re going to be taking on the debt and whatever comes with it.”

Corus has been grappling with a sustained decline in television advertising revenue, which has taken a severe toll on its balance sheet.

Its struggles were on full display in its latest financial results release last week, where it reported a wider loss for its fourth quarter as lower-than-expected TV ad revenue weighed on its results.

The company said it had anticipated TV advertising revenue to fall about 20 per cent year-over-year in its fourth quarter, but it came in slightly weaker than that, falling 23 per cent from the prior year to $88.7 million.

It reported a loss of $277.1 million attributable to shareholders in its latest quarter as it took a $263.6 million non-cash impairment charge and saw its revenue fall 14 per cent.

The company noted that it expects economic uncertainty, coupled with the ongoing shift in advertising demand to digital platforms, to continue to drag on its results.

Corus, the company behind Global Television, owns specialty television services, radio stations and conventional television stations, as well as digital and streaming platforms.

This report by The Canadian Press was first published Nov. 3, 2025.

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