Following Bankruptcy Filing, Quebecor World’s Financial Plans ‘Ahead of Schedule’
Commercial printer extends Wenner contract, looks to lock in more.
In the wake of Quebecor World’s bankruptcy protection filing in Canadian courts earlier this year, the commercial printer has managed to finalize a number of new and extended printing contracts in recent weeks. The most recent agreement came Monday—a multi-year extension with Wenner Media to print Rolling Stone, Us Weekly and Men’s Journal, effectively increasing its printing volume with the publisher by 10 percent.
“Many of our customers have come to us to activate their renewals and extensions as a demonstration of support,” Quebecor World magazine division president Doron Grosman tells FOLIO:. Last week, the printer announced several new agreements with publishers including Meister Media and Amos Publishing.
As part of its bankruptcy filing, Quebecor World announced that it had 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. Grosman says that the company now has about $500 million in liquid assets and has exceeded its cash flow projections by $160 million.
“Our plans to stabilize the company are ahead of schedule,” Grosman says.
Business As Usual?
As its bankruptcy protection procedures continue, one could assume that Quebecor World would finalize new printing agreements at steeply discounted rates. That’s not the case, according to Grosman. “You would expect a company in creditor protection to be unable to compete, but our prices remain competitive,” he says. “More important, we have won business recently where we were not the lowest bidder.”
The Economist last month said it had filed a legal petition to terminate its contract with Quebecor World. Grosman, however, says that no other magazines have sought to end their contracts and expects to announce “several significant” new and renewed business deals over the next few months.
Quebecor World is expected to release its year-end 2007 financial report before then end of April.