The key Canadian player in the restructuring dance at CanWest Global Communications Corp. is a 44-year-old math whiz with a knack for pulling big returns out of complicated situations.
Greg Boland, the founder and chief executive officer of West Face Capital Inc., isn't in it to be a media mogul. But he and other CanWest creditors may yet decide the fate of some of Canada's most important media assets, including a national television network and the pre-eminent daily newspapers in Vancouver, Edmonton, Calgary and Ottawa.
West Face is one of three CanWest bondholders that purchased $100-million in new debt from the company in a deal announced Wednesday. The other two are U.S. investment funds GoldenTree Asset Management and Beach Point Capital Management. The money, along with another $75-million from CIT Business Credit Canada Inc., allows CanWest to repay its bank loans, gives it operating funds for the summer and, most importantly, buys it time to craft a broader restructuring plan to reduce its crushing $3.9-billion in debt.
The exact shape of that plan is still to be determined, but the one sure thing is that it will involve a debt-for-equity swap that will see creditors taking a major ownership stake in the media company.
One thing that makes a CanWest restructuring tricky is the number of entities involved and the complexity of the debt structure. There are bonds and loans in four different subsidiaries of CanWest, plus a future obligation to pay a large (and still undetermined) sum to the private equity arm of Goldman Sachs Group Inc., a legacy of the 2007 deal to buy Alliance Atlantis Communications Inc.
But it's the sort of investment on which Mr. Boland has built his reputation as one of Bay Street's top hedge fund managers.
His best-known successes are with companies that were already in bankruptcy court or nearly so. His investment partnership bought 18 per cent of Stelco Inc. when it was in bankruptcy protection for less than $30-million. The steel maker was sold for more than $1-billion in 2007, and West Face made a small fortune. He was also involved in the restructuring at Saskatchewan Wheat Pool (now Viterra Inc.) when that company was subsumed by debt troubles in the early part of the decade.
West Face's profile has been increasing of late. Mr. Boland was one of the most vocal opponents of Total SA's hostile takeover bid for UTS Energy Corp.; his opposition was one of the reasons Total failed.
As a big shareholder of ACE Aviation Holdings Inc., the 75-per-cent shareholder of Air Canada, West Face and a small number of other investors helped put a stop to ACE's plan to dissolve early this year. The firm still wants ACE to wind up, but in a different way, to avoid liquidating its Air Canada stake in a depressed market. (West Face also owns a significant stake in ACE spinoff Jazz Air Income Fund, an investment that has not worked out so well to date.) Less publicly, the firm was known to be one of the shareholders agitating for change at Petro-Canada before the former state-owned oil company announced its merger proposal with Suncor Energy Inc. in March.
Mr. Boland, who has given few in-depth interviews, told the Globe in 2006 of a moment of chance that led to his start on Bay Street. In the mid-1980s, he was waiting tables at Palmerston, an upscale Toronto restaurant, when the place hosted a fundraising event for the University of British Columbia's portfolio management foundation, which lets finance students learn by managing millions of dollars of the school's money. The idea stuck in his head, and before long he went to Vancouver in search of a degree in computer science and finance.