TORONTO — Shares of Corus Entertainment Inc. stock, which trade on the TSX exchange, tumbled by 12.4% on Tuesday after the owner of broadcast media stations across Canada announced Friday that it has completed an agreement to amend its March 2022 “Sixth Amended and Restated Credit Agreement” with its bank group, led by RBC Capital Markets and TD Securities.
Dated March 18, 2022, the Credit Facility was established when Corus shares were trading at about $5 CDN.
Now, with a new agreement, the maximum Total Debt to Cash Flow Ratio required under the financial covenants has been increased, through and including November 30, 2023.
The amendment also includes a financial covenant which, in the event that the Total Debt to Cash Flow Ratio exceeds a certain level, may restrict distributions.
Investors were hardly pleased coming out of the Family Day long weekend, with CJR.B dipping 27 important Loonies, finishing Tuesday’s trading at $1.91 CDN — tying an all-time low for the Toronto-headquartered company with shares trading in April 2019 at $7.62 CDN. One decade ago, Corus stock was trading in the mid-$25 CDN range.
Corus is the owner of the Global broadcast television network and Canadian versions of such U.S. brands as ET (Entertainment Tonight), Food Network, HGTV, National Geographic and Adult Swim. It is also a large owner of radio stations, with properties including “QR Calgary,” which is being questioned by the CRTC for its simulcast, which could run afoul of Canadian regulatory policies. In Toronto, Corus brands include CFNY “102.1 The Edge” and CILQ “Q107.” Other key markets include Edmonton and the Ontario cities of Hamilton and London.
