Hollinger sells 28 Ontario newspapers for $220 million

Conrad Black's Hollinger group has sold the bulk of its remaining Ontario newspapers for $220 million.

Hollinger announced Tuesday it sold 28 newspapers for cash to a group including Scotia Merchant Capital, Ontario Teachers' Pension Plan Board and a company controlled by Michael Sifton, who has been an executive at Hollinger in charge of the papers he has purchased.

The papers sold are based in central, eastern and northern Ontario. They include the Peterborough Examiner, the Kingston Whig-Standard and the Sault Ste. Marie Star.

Hollinger Canadian NewspapersLimited Partnership will use the sale proceeds to pay a special distribution to its unitholders of $1.18 per unit.

Once the sale goes through, Hollinger L.P.'s assets will comprise 8.1 million non-voting shares and 816,480 voting preference shares of CanWest Global Communications Corp. and approximately $278 million of CanWest debt, some trade publications and directory publishing division, newspapers in Chatham and Sarnia and a group of newspapers located principally in British Columbia.

Hollinger International has an 87 per cent equity interest in Hollinger L.P.

Hollinger International still has its 50 per cent stake in the National Post, along with The Daily Telegraph in Britain, The Chicago Sun-Times, The Jerusalem Post, a large number of community newspapers in the Chicago area and a portfolio of new media investments.

While Tuesday's deal to sell the 28 newspapers is large, it pales in comparison to last year's sale by Hollinger of half the National Post and the majority of Hollinger's Canadian properties to CanWest Global for $3.2 billion. That sale included a large number of daily newspapers including the Ottawa Citizen, The Vancouver Sun, the Calgary Herald, the Edmonton Journal, and the canada.com Internet portal