MONTREAL (CUP) – The newspaper-publishing unit of Canwest Global Communications is up for bid by chief lenders after it was successfully granted creditor protection on Jan. 8.

The deal was reached four months after parent company Canwest Global Communications first filed for bankruptcy protection in October, citing its losses on falling advertising revenues, atop an already-steep debt of $4 billion from previous acquisitions.

After successfully filing for creditor protection under Companies’ Creditor Arrangement Act, the publishing division is in the hands of Canwest’s creditors, including the Big Five Canadian banks, alongside unidentified international backers.

The auction has garnered at least four potential bidders; Canwest hopes that a bid between $1 billion and $1.5 billion – less than half of what was paid for its acquisition back in 2000 – will be made sometime in next six to seven weeks.

In the case that none of the bids made in the upcoming weeks are accepted, the banks have decided that they will set up a new, publicly traded company to run the newspapers, which will be independent from both Canwest and its creditors.

In the meantime, operations are still managed by Canwest. The publishing division is the country’s largest newspaper chain and owns the National Post, along with 10 major city dailies, including the Montreal Gazette and Ottawa Citizen.

Before any announcement of Canwest’s sale, the National Post was moved from the other dailies as a separate legal entity, thus not qualifying for creditor protection. Operations at the Gazette and other affected dailies are not anticipated to change in the near future.

Among other bidders, Jerry Grafstein and Raymond Heard – the co-founder of Citytv and an ex-Global TV executive, respectively – are reported to be interested in the Post, Gazette and Citizen.