Quebecor World Files for Bankruptcy Protection

Decision comes one day after rescue financing deal fails.

By Jason Fell
01/21/2008

Quebecor World, one of the world’s largest printers, announced today it has filed for bankruptcy protection under Canada’s Companies’ Creditors Arrangement Act.

Quebecor World also announced that it has entered into a $1 billion financing deal with Credit Suisse and Morgan Stanley to help finance the company’s operating needs, including employee wages, benefits and other expenses. The financing is subject to approval by courts in Canada and the U.S.

“Despite the difficult economic conditions in general and in the credit market in particular, Quebecor World continues to have a positive cash flow, expert teams of experienced employees, valuable, performing assets and an impressive roster of customers such as you,” Quebecor World president and CEO Jacques Mallette wrote in a memo to customers obtained by industry consultant Bob Sacks. “In the months ahead we will be reviewing the company's performance and developing ways to make further improvements in all our operations.”

The announcement comes one day after Quebecor World’s deadline for $400 million [Canadian] in a rescue financing deal with Tricap Partners Ltd. passed without an agreement. The company reported a net loss of $315 million in the third quarter of 2007.

“The prudent action we have undertaken today and the vote of confidence represented by the $1 billion of new financing means that we will continue to operate on a normal basis as we restructure for the future,” wrote Mallette.

A number of the company’s U.S. subsidiaries are covered also by the
CCAA filing under Chapter 11 of the U.S. Bankruptcy Code. Quebecor
World’s operations outside of North America are not included in the
CCAA filing.