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Quebecor bail-out plan


UPDATE: Well, now it’s looking like the bail-out never came:

Quebecor World Inc (IQW.TO: Quote, Profile, Research) said on Tuesday it failed to obtain $125 million of new financing required under waivers from its banking syndicate and missed a debt payment on $400 million of notes. The struggling commercial printer, which is working on getting bank approval for C$400 million of rescue financing from its parent, media group Quebecor Inc (QBRa.TO: Quote, Profile, Research), and a private equity fund managed by Brookfield Asset Management (BAMa.TO: Quote, Profile, Research), said it did not make the $19.5 million payment of interest due that was due on Tuesday on its $400 million 9.75 percent Senior Notes due 2015.

We’re in the middle of an urgent project and don’t have time to follow this up, but it seems pretty important. We’ve been hearing about the financial problems at Quebecor, the major printer for Marvel and DC, for sometime, and they are quite serious but a bail out plan has been accepted:

Quebecor World Inc. (TSX: IQW), the struggling commercial printing giant, said late Monday it has accepted the $400 million rescue financing proposal saying it is “in the best interests of the company and its stakeholders.”

Quebecor World said the bid, submitted jointly by Quebecor Inc. and Tricap Partners Ltd., a private equity fund managed by Brookfield Asset Management Inc. (TSX: BAM.A), was reviewed and accepted by a special committee composed of independent directors.

The package, considered a financial life-line at this stage for Quebecor World, was announced Friday to help it avert a cash crunch.

It was subject to several conditions being met, including the consent of Quebecor World and its banking syndicate.

Tricap and Quebecor Inc. will each provide $200 million.

We don’t know what caused Quebecor’s financial problems, but if the mind-bogglingly wasteful shipping and packaging on display when they mail us something — a single comic wrapped in four boxes and FedExed — is any example, we can see where the problem lies.

  1. One thing that has hurt them is the strength of the Canadian dollar (relative to the U.S. dollar). That makes American printers more competitive. And I am assuming that most of their customers are American.

  2. Ever since our dollar surpassed your I have been expecting this to happen. Quebecor is as professional and reliable as any, but their advantage was always the lower Canadian dollar.

  3. There is a Quebecor building just outside Boston (located in Taunton, MA). Are they the same company but with a US outpost?

  4. Another thing that may have hurt them is the poor quality of their work (at least on my books). The sales rep I dealt with got defensive and tried to blame me when it was objectively it was their fault. I vowed to never use them again.

  5. Of course, problems with Quebecor would affect much more than just comics. I work in textbook publishing, and Quebecor’s Kentucky plant is one of two or three of the biggest printers I’ve seen publishers use.

  6. JON:
    “I vowed to never use them again.”

    I’ve been publishing pulp fiction reprints for years, and had a similar problem. There was a problem with a trade paperback they printed. A minor problem, but a major headache dealing with the rep. “Have you ever SEEN a trade paperback??” he defensively asked.

    I printed two issues of THE SPIDER with them … then found a Florida printer with the best prices of anyone I’ve ever used. I saved over $1000 by switching, and saved even more on shipping from FL to NJ, since they were crossing an international line.

    Clearly, my small press imprint was a blip on their radar, back in 1997. But with the money they charged, it was a major radar blip for me.

  7. Hey Rich,

    Do you know what division you used? Was it the guys out of Montrea and do you remember the plant name?

    For sure the last few year at Quebecor have been extremely difficult… Quality has been average… They’ve been hit by so many problems… Sales executives going to RRD with huge accounts, failed aquisitions in France, the exchange rates, bad management decisions , increased competition in a down market … not a good thing when you are the largest printer in the world…

  8. Patrick:

    I’m pretty sure it was Montreal … that didn’t help with long distance calls, either. Florida was cheaper to call, and this was before cell phones and land-lines with better long distance deals.

    I would have to dig deep into some papers I could have (and should) recycled years ago. Off-hand, I can’t remember the name of the rep, or the division. But it was definitely Montreal … a receptionist answered the phone in French, then English once I spoke to her.

    Yeah … the harder they fall …

  9. Hi Rich,

    We used to be part of Quebecor but were sold 2 years ago to private investors… You had me wondering which division you dealt with…

    Yes the bigger they are … The shares were worth 45$ 6 years ago… going for 25 cents yesterday! Nice trade if you were short on them…

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