Canadian Comix News & Culture
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Tuesday, January 22, 2008
Quebecor Files for Bankruptcy
:: Posted by Bryan @ 1/22/2008 12:00:00 AM 
Quebecor World Inc. has filed for bankruptcy protection in the U.S. and Canada, according to a variety of reports. Often characterized as the second-largest publicly-traded commercial printer in North America (see RR Donnelly and Quad/Graphics), Quebec-based Quebecor is the printer of choice for many comic book and graphic novel publishers. Despite having made arrangements for $400 million in funding last week, the debt-laden printer still faced approval from its creditors, the deadline for which came and went with no comment over the weekend. Then yesterday the company asked for and received creditor protection in Quebec, with a "Chapter 11" filing to follow in the U.S. Quebecor World's debts are being covered but it has a lot of them, according to this Reuters article.
The company's stock lost half its value on Monday, plunging 17 cents on the Toronto Stock Exchange. An autopsy is performed here.
From Quebecor's own press release:
the Board of Directors of the Company has authorized it to file for creditor protection under the Companies' Creditors Arrangement Act (CCAA) in Canada. A number of Quebecor World's U.S. subsidiaries are also covered by the CCAA filing in Canada as well as in the United States under Chapter 11 of the United States Bankruptcy Code. Application under the CCAA will be heard by the Quebec Superior Court on January 21, 2008 and the filing under Chapter 11 of the U.S. Bankruptcy Code will be made in the Southern Judicial District of New York.
Quebecor World's Board of Directors, in a unanimous decision, authorized the Company to take this action as the best alternative for the long-term interests of the Company, its employees, customers, creditors and other stakeholders. Operations outside of North America are not included in these filings.
The Company has also announced that it has entered into financing commitments with Credit Suisse and Morgan Stanley for new financing in the amount of US$1 billion. This financing, which is subject to approval of Courts in both Canada and the United States, will allow the Company to meet all current operating needs, including wages, benefits and other operating expenses.
Jacques Mallette, Quebecor World's President and CEO said: "These steps allow the Company to continue operating as a going concern for the benefit of all those affected including our many loyal employees, customers and suppliers. The Company has a strong business and valuable assets located throughout the world. 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."
Mr. Mallette added: "Today's filing is the 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. The steps we initiate today will allow the Company to make changes which are necessary to ensure the long-term viability of the Company within a process that ensures fair and equitable treatment for all stakeholders."
Labels: Ontario, printing, publishing, Quebec, Toronto
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