Corus Entertainment’s board of directors has approved a plan to significantly reduce the company’s debt in a recapitalization transaction with lenders and bondholders.

The move will see Corus fall under the ownership of NewCo., a newly formed corporation comprised of holders of about 74% — or $750 million — of senior unsecured notes, which will hold 99% of shares. Existing shares of the company will be exchanged on a 1:1 basis and represent 1% of all Corus shares, according to a news release issued Monday (Nov. 3).

The arrangement is expected to reduce Corus’ $1.1 billion debt by more than $500 million, and reduce annual cash interest by up to $40 million.

In a statement, Corus CEO John Gossling said the transaction “will solidify our financial foundation and position Corus for the long term” thanks to “significant support from our secured lenders and bondholders.”

The company has started the transaction under the Canada Business Corporations Act, and received a preliminary interim order from the Ontario Superior Court of Justice to grant a stay of proceedings to protect it from any defaults related to the transaction plan. The plan must be approved by Corus’ securityholders, and is also subject to possible regulatory approvals.

The arrangement is not expected to impact Corus’ current obligations to suppliers, partners, customers and employees, said the release.

If approved, the transaction will see a five-member board of directors established upon closing, and “certain key leases” will be renegotiated.

“This transaction represents the culmination of the strategic work to optimize Corus’ capital structure and manage the company’s balance sheet, following the assignment of its senior credit facility earlier in 2025,” said Mark Hollinger, independent lead director of the board of directors, in a statement.

“After conducting a robust and comprehensive review process with our external financial and legal advisors, the board concluded this recapitalization transaction represents the best available option for the Company and its stakeholders at this time,” added Hollinger.

Corus reported its Q4 and year-end results last week, which saw revenue declines across the board, largely driven by a lower-than-expected ad revenue performance. Corus shares were valued at $0.095 per share in the Toronto Stock Exchange as of Sunday (Nov. 2).

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