The Quebec government is providing $5 million in interim financing to help a French-language newspaper chain that filed Monday for creditor protection.
Pierre Fitzgibbon, minister of the economy and innovation, announced the financial support from Investissement Quebec for Le Groupe Capitales Medias (GCM), whose daily newspapers include Le Droit of Gatineau-Ottawa and the Quebec City Le Soleil.
"Six newspapers cannot be closed," Fitzgibbon said at a news conference.
He cautioned that the government will not become a shareholder and the money will be used to establish a legal process to seek offers for the sale of the company in whole or in part.
Fitzgibbon also announced that former federal cabinet minister Martin Cauchon, who founded the newspaper chain, has resigned as executive chairman. He will remain until the arrival of an acting executive chairman.
The group owning several regional dailies has filed a notice of intent in order to protect itself against bankruptcy.
Capitals Media Group CEO Claude Gagnon wrote on Le Soleil's website that the chain's dailies were affected by a drop in advertising revenue resulting from fierce competition from social media giants Facebook and Google.
"This legal process and the funding from the government of Quebec will therefore enable GCM to continue its normal activities and to consider all options to ensure the sustainability of the group's entities," he added.
The newspaper chain has been experiencing liquidity problems for some time.
Premier Francois Legault promised Sunday that his government will "do everything" so that the newspapers survive a reported threat of closure as of Aug. 26. He previously said the government would be open to emergency one-time help until a general media assistance program is put in place.
The company also owns Le Nouvelliste in Trois-Rivieres, La Tribune in Sherbrooke, La Voix de l'Est in Granby, Le Quotidien and Le Progres week-end in Saguenay.
Quebecor Inc., which publishes the Journal de Quebec and Le Journal de Montreal, has expressed interest in the newspapers but the Liberal opposition is worried about media concentration.
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