January 24 – January 31, 2008 Edition

Canada’s Largest
Book Printer Files
For Court Protection

MONTREAL/1/22/08–Quebecor World Inc., one of the largest book printing firm in the U.S. and Canada, has filed for bankruptcy protection, according to a report in the Toronto Star. The company seeks protection in both the US and Canada, and a judge was expected to approve the petition early this week. The company has arranged commitments from Crédit Suisse and Morgan Stanley to cover $1 billion (Canadian) for current operating expenses, wages and benefits, pending court approval.

Quebecor hopes to continue operating as a going concern, restructuring its operations and finances under court protection, until it overcomes its liquidity crisis. Jacques Mallette, Quebecor World’s president and CEO, blamed Quebecor World’s troubles on “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 Star reported.

Quebecor Inc., which is also the majority partner in one of Canada’s largest media conglomerates, says the parent company and its media subsidiaries “are not affected in any way” by Quebecor World’s decision to seek bankruptcy protection.

Quebecor employs 28,000 people and is one of Quebec’s most prominent businesses. The court filing stated that it had assets of between $100 million to $500 million. It has liabilities of more than $1 billion, mostly owed to banks and other lending institutions, as the result of a three-year restructure that saw the closing or sale of 21 plants and layoffs of 5,000 employees.