Quebecor World shares dropped 22 percent today closing at $3.12 share. The drop came after the company announced a 750 million refinancing plan on Tuesday in which it outlined steps to:

1. offer approximately Cdn$250 million of its equity shares, consisting of a public offering of Subordinate Voting Shares in Canada and the United States for contemplated gross proceeds to the Company of approximately Cdn$185 million ($191 million) (or approximately Cdn$213 million ($220 million) if an over-allotment option granted to the underwriters involved is exercised in full) (the “Public Equity Offering”); as well as an issuance on a private placement basis in Canada to Quebecor Inc., the Company’s controlling shareholder, of a combination of Multiple Voting Shares and Subordinate Voting Shares for an aggregate amount of approximately Cdn$65 million ($67 million) on the same terms as the Public Equity Offering (together with the Public Equity Offering, the “Equity Offering”), in order to allow Quebecor Inc. to maintain the level of its current economic interest in Quebecor World;

2. offer on a private placement basis an aggregate of $500 million of new debt securities, consisting of (1) new senior unsecured notes of the Company (the “Senior Notes”) in an aggregate amount of approximately $400 million (the “Senior Note Offering”), and (2) new senior unsecured convertible debentures (the “Convertible Debentures”) in an aggregate amount of approximately $100 million (the “Convertible Debenture Offering”); and

3. amend the Company’s credit facilities, pursuant to which (a) the commitment of the Company’s syndicate of lenders would be reduced to $375 million, (b) the maturities of such facilities would be extended by one year to January 2010 and (c) the Company would be provided with greater financial flexibility under its covenants (the “Credit Facilities Amendment”). The Equity Offering, the Senior Note Offering and the Convertible Debenture Offering are conditional upon one another and the Credit Facilities Amendment is conditional on the completion of the Equity Offering, the Senior Note Offering and the Convertible Debenture Offering.

Quebecor World announced today that it was withdrawing its refinancing plan involving an offer of approximately Cdn$250 million of its equity shares, an offer on a private placement basis of an aggregate of $500 million of new debt securities and amendments to the Company’s secured credit facilities. The Company has decided to withdraw the refinancing plan due to adverse current financial market conditions. The Company will continue to evaluate financing alternatives, including the issuance of equity and debt securities when conditions are more favourable, asset sales and sale leaseback transactions and explore other alternatives. To that effect, the Board will hire independent financial advisors.