Quebecor World granted creditor protection
Financially troubled printing giant Quebecor World Inc. on Monday obtained creditor protection in Quebec.
The company said the filing was a result of tough industry conditions — especially in Europe — and its failure to raise new capital.
A creditor protection filing was also expected to be approved in New York on Tuesday.
Investors sent the stock down 17 cents to a finish of 16.5 cents on the TSX. The stock is now worth a fraction of its one-year high of $17.25, which was reached last February.
A Sunday deadline to work out conditions on a $400-million financing bailout package from Quebecor Inc. and Tricap Partners Ltd. passed without success, the company said, resulting in termination of the package.
Quebecor Inc. — the biggest shareholder in Quebecor World — said lenders of the printing company did not accept the terms of the deal.
Quebecor World said it has now arranged for $1 billion in new financing from Credit Suisse and Morgan Stanley. The money is subject to court approval.
"The company has a strong business and valuable assets located throughout the world," said Jacques Mallette, Quebecor World's president and CEO, in a press statement.
"We believe that the steps we are taking today and the strong vote of confidence given to us by our new finance lenders will ensure that we will be able to protect the value of the business for our stakeholders," Mallette said.
Quebecor World has been struggling with price pressures, lower volumes and operating inefficiencies. In recent months, it has posted a $315-million quarterly loss, cancelled a European asset sale and replaced its CEO. The company also saw an earlier financing plan fall through.
Its debt has been downgraded to "junk" status by the DBRS rating agency. It also faces a possible delisting of its shares by the TSX.
Quebecor World has about 28,000 employees around the world.
With files from Canadian Press