MONTREAL, CANADA - Nov 13, 2007 -- Quebecor World Inc. announced a refinancing plan today pursuant to which it intends to concurrently:
(i) 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;
(ii) 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
(iii) 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 © 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.
In connection with the Public Equity Offering, the Company has filed a preliminary short form prospectus with the securities regulatory authorities in each of the provinces of Canada and a registration statement with the Securities and Exchange Commission.
The net proceeds of the Senior Note Offering and the Convertible Debenture Offering and a portion of the net proceeds of the Equity Offering will be used to repay indebtedness under the Company's credit facilities and the Company intends to use the remaining net proceeds of the Equity Offering to redeem its Series 5 Cumulative Redeemable First Preferred Shares for an aggregate redemption price of Cdn$175 million (approximately $185 million) plus accrued and unpaid dividends. The redemption of these preferred shares is conditional upon the completion of each of the elements of the refinancing plan and subject to re-confirmation by the Company's Board of Directors. Any remaining net proceeds of the Equity Offering will be used for general corporate purposes, including for the repayment of additional indebtedness.
The terms of both the new Senior Notes and the Convertible Debentures will be settled between the Company and the respective initial purchasers of the notes. Both the Senior Notes and the Convertible Debentures will be issued by the Company and will be unconditionally guaranteed on a senior unsecured basis by Quebecor World (USA) Inc., Quebecor World Capital ULC and Quebecor World Capital LLC, all wholly-owned subsidiaries of the Company.
In addition, the Company announces that it has re-filed its interim financial statements for the period ended September 30, 2007 as well as the corresponding management's discussion and analysis, in order to make certain changes to Note 18 - Subsequent Events to such financial statements relating to the Company's announced sale/merger of its European operation, including to correct the amount reported for the estimated accounting (non-cash) loss on disposal before cumulative translation adjustment impact resulting from such sale/merger, from $70 million to $170 million.
While a registration statement relating to the Equity Offering has been filed with the U.S. Securities and Exchange Commission, it has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.
A copy of the prospectus may be obtained from the Company's Investor Relations Department, at 612 St-Jacques Street, Montreal, Quebec Canada H3C 4M8, tel. 800-567-7070.
Neither the Senior Notes nor the Convertible Debentures have been nor will they be registered at this time under the United States Securities Act or applicable state securities laws, and neither the Senior Notes nor the Convertible Debentures may be offered or sold in the United States absent registration or an applicable exemption from registration. The Senior Notes and the Convertible Debentures will be offered and sold to qualified institutional buyers pursuant to Rule 144A under the United States Securities Act, as amended, and outside the United States pursuant to Regulation S under the United States Securities Act. Neither the Senior Notes nor the Convertible Debentures have been nor will they be qualified for sale to the public under applicable Canadian securities laws and, accordingly, any offer and sale of the notes in Canada will be made on a basis which is exempt from the prospectus and dealer registration requirements of such securities laws.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States and shall not constitute an offer to sell or the solicitation of any offer to buy any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.