Jan 21, 2008 -- Quebecor World Inc. today announced that 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."
The deadline of 9:00 a.m. January 20, 2008, for satisfaction of the conditions precedent to the previously announced CDN$400 million rescue financing agreement with Quebecor Inc. and Tricap Partners Ltd. having passed without such conditions being satisfied results in the agreement relating to the rescue financing being terminated and without effect. The Company recognizes and appreciates the time and effort of Quebecor Inc. and Tricap Partners in connection with the rescue financing.
Further to a news release issued above and the completion of subsequent proceedings before the Quebec Superior Court, Quebecor World Inc. announced that it has obtained an Order for creditor protection under the Companies' Creditors Arrangement Act.
Under the terms of the Order, Ernst & Young Inc. will serve as the Court-appointed Monitor under the CCAA process and will assist the Company in formulating its restructuring plan.
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