Quebecor receives creditor protection

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A Quebec Superior Court justice last Monday approved a motion to place commercial printer Quebecor World un­der Companies' Creditors Arrangement Act (CCAA) protection for 30 days, un­til February 20, according to published reports. The justice also authorized $1 billion in financing from Credit Suisse and Morgan Stanley.

Following, on Wednesday, the company obtained US court approval to borrow the money from Credit Suisse and Morgan Stanley.

Ernst & Young Inc. will serve as the court-appointed monitor under the CCAA pro­cess. Operations outside of North America are not included in either filing.

Quebecor World is seeking creditor pro­tection as a “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,” said Jacques Mal­lette, president/CEO at Quebecor World, in a statement at the time of the filing. “The steps we initiate today will allow the company to make changes which are necessary to ensure the long-term viability of the company.”

The Montreal-based company prints a wide variety of publications at plants in the United States including Time and Parade magazines as well as cata­logs for Victoria's Secret and Williams-Sonoma.

The company filed for bankruptcy pro­tection after a previously announced res­cue financing offer from Tricap Partners and Quebecor Inc. was scuttled because several of Quebecor World's banks did not consent to the terms proposed. The rescue plan was valued at $400 million Canadian ($390 million US).

Communications company Quebecor Inc. is the principal shareholder in Que­becor World. The latter's current situa­tion will reportedly have no effect on the continuing operations of either Quebe­cor Inc. or Quebecor Media Inc., which own newspapers throughout Canada and Quebec's leading cable TV operator.

There is speculation that the bank­ruptcy filings give Quebecor a chance to completely separate itself from the print­ing business. To that effect, Quebecor Inc. has formally advised Quebecor World that it must remove “Quebecor” from its corporate name.

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