CORUS ENTERTAINMENT ANNOUNCES RECAPITALIZATION TRANSACTION

Executive Summary

• Corus Entertainment announced a proposed recapitalization transaction via a plan of arrangement that will reduce total debt and liabilities by over $500 million and cut annual cash interest expense by up to $40 million.
• The deal includes issuing new senior secured notes, a $125 million first‑lien revolving credit facility, and the creation of a newly‑formed corporation (“NewCo”) whose shares will replace existing equity; existing shareholders will receive NewCo Shares representing 1% of the combined entity.
• All senior lenders and noteholders (representing >74% of $750 million senior notes) have signed support agreements, and the Shaw Family Living Trust (owner of >80% of Class A voting shares) has pledged to vote in favor.

Key Details

• Debt Reduction: >$500 M reduction of third‑party indebtedness and other liabilities.
• Interest Savings: Up to $40 M annual cash interest savings.
• Revolving Credit Facility: Increased from $75 M to $125 M, first‑lien secured.
• New Senior Secured Notes: $300 M aggregate principal, 5‑year maturity.
• Second‑Lien Notes: $250 M senior notes exchanged for second‑lien notes with a 6‑year maturity.
• Equity Exchange: $500 M of senior notes exchanged for NewCo common shares (≈99% of NewCo). Existing Class A and Class B shares exchanged 1:1 for NewCo Shares representing ~1% of NewCo on a non‑diluted basis.
• Warrants to Lenders: Lenders granted warrants covering 10% of fully diluted equity of NewCo.
• Support Agreements:
• Consent & Waiver with all senior credit facility lenders.
• Support Agreement with noteholders representing >74% of $750 M senior notes.
• Shareholder Support Agreement with Shaw Family Living Trust (owner of >80% Class A voting shares).
• Court Orders: Preliminary interim order from Ontario Superior Court granting a stay of proceedings to protect the company during the arrangement process.
• Governance Changes: Board will be refreshed at closing, initially comprising five directors.
• Regulatory & Shareholder Approvals Required: Completion subject to lender and noteholder consents, shareholder votes at special meetings, court approval of the plan of arrangement, and regulatory approvals (CRTC, TSX, etc.).
• Advisors: Legal – Osler, Hoskin & Harcourt LLP; Jefferies and KPMG LLP (financial); Bennett Jones LLP (noteholders’ legal counsel); Canaccord Genuity Corp. (noteholder financial advisor); Thornton Grout Finnigan LLP (senior credit facility lenders).

Notable Quotes

• “The proposed transaction will solidify our financial foundation and position Corus for the long‑term,” – John Gossling, CEO.
• “This transaction represents the culmination of the strategic work to optimize Corus’ capital structure…,” – Mark Hollinger, Independent Lead Director.

All forward‑looking statements are subject to risks and uncertainties detailed in the release.