Quebecor World Files for Bankruptcy Protection
Decision comes one day after rescue financing deal fails.
Quebecor World, one of the worldâ€™s largest printers, announced today it has filed for bankruptcy protection under Canadaâ€™s Companiesâ€™ 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 companyâ€™s operating needs, including employee wages, benefits and other expenses. The financing is subject to approval by courts in Canada and the U.S.
â€śDespite 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,â€ť Quebecor World president and CEO Jacques Mallette wrote in a memo to customers obtained by industry consultant Bob Sacks. â€śIn the months ahead we will be reviewing the company's performance and developing ways to make further improvements in all our operations.â€ť
The announcement comes one day after Quebecor Worldâ€™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.
â€śThe 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,â€ť wrote Mallette.
A number of the companyâ€™s U.S. subsidiaries are covered also by the
CCAA filing under Chapter 11 of the U.S. Bankruptcy Code. Quebecor
Worldâ€™s operations outside of North America are not included in the