Quebecor World Seeks Protection
MONTREAL—Quebecor World, at one time the crown jewel in the Quebecor Inc. empire, filed for creditor protection in the United States and Canada, while simultaneously securing $1 billion in new financing that will allow it to meet all current operating needs.
North America’s second-largest printer quickly secured protection under the Companies’ Creditors Arrangement Act (CCAA) in Canada and Chapter 11 protection under the U.S. bankruptcy code. Ernst & Young will serve as the court-appointed monitor under the CCAA process and will assist Quebecor World in formulating its restructuring plan. The decision to file for creditor protection was unanimously approved by Quebecor World’s board of directors.
The company received a much-needed boost when it secured $1 billion in new financing from Credit Suisse and Morgan Stanley. Court approval was quickly received from both countries, and the funds will enable Quebecor World to address its operating needs such as wages, benefits and other expenses.
In a statement, Quebecor World President and CEO Jacques Mallette said the filing was a result of industry pressures, particularly in Europe, along with the company’s inability to raise new capital in the current market environment and its failure to complete the sale of its European operations.
“These steps allow us to continue operating as a going concern for the benefit of all those affected, including our many loyal employees, customers and suppliers,” he noted. “The company has a strong business and valuable assets located throughout the world. We believe that the steps we are taking. . .will ensure that we will be able to protect the value of the business for our stakeholders.”
A C$400 million rescue financing proposal generated by Quebecor Inc. and private equity fund Tricap Partners was terminated after it failed to gain approval from Quebecor World’s creditors.