A Quebec Superior Court justice last Monday approved a motion to place commercial printer Quebecor World under Companies’ Creditors Arrangement Act (CCAA) protection for 30 days, until February 20, according to published reports. The justice also authorized $1 billion in financing from Credit Suisse and Morgan Stanley.
Following, on Wednesday, the company obtained US court approval to borrow the money from Credit Suisse and Morgan Stanley.
Ernst & Young Inc. will serve as the court-appointed monitor under the CCAA process. Operations outside of North America are not included in either filing.
Quebecor World is seeking creditor protection as a “result of industry pressures, particularly in Europe, combined with the inability of the company to raise new capital in the current market environment and the inability to complete the sale of its European operations,” said Jacques Mallette, president/CEO at Quebecor World, in a statement at the time of the filing. “The steps we initiate today will allow the company to make changes which are necessary to ensure the long-term viability of the company.”
The Montreal-based company prints a wide variety of publications at plants in the United States including Time and Parade magazines as well as catalogs for Victoria’s Secret and Williams-Sonoma.
The company filed for bankruptcy protection after a previously announced rescue financing offer from Tricap Partners and Quebecor Inc. was scuttled because several of Quebecor World’s banks did not consent to the terms proposed. The rescue plan was valued at $400 million Canadian ($390 million US).
Communications company Quebecor Inc. is the principal shareholder in Quebecor World. The latter’s current situation will reportedly have no effect on the continuing operations of either Quebecor Inc. or Quebecor Media Inc., which own newspapers throughout Canada and Quebec’s leading cable TV operator.
There is speculation that the bankruptcy filings give Quebecor a chance to completely separate itself from the printing business. To that effect, Quebecor Inc. has formally advised Quebecor World that it must remove “Quebecor” from its corporate name.
