Canwest Global Communications expects to breach another debt covenant after its newspaper and digital subsidiary opted to not pay $10 million due to bondholders Friday.

The broadcaster said its Canwest Limited Partnership subsidiary deferred the payment to keep operating while it works to recapitalize.

Canwest LP, which owes around $1.4 billion after it took the former CanWest MediaWorks LLP private in 2007, will be in breach of its financial covenants on the 9.25% senior notes on May 31.

That breach will put bondholders in a position to demand payment of the loan if creditor talks falter.

The broadcaster last week secured $175 million in new loans as it negotiates with senior lenders and U.S. bondholders for a wider recapitalization of its overall $4 billion debt load before July 15.