Leadership, Financing Troubles Quebecor World

MONTREAL—Only days after confirming that the sale of its European assets had failed, Quebecor World announced Wes Lucas stepped aside as president and CEO of the troubled company.

Lucas is being replaced by Jacques Mallete, who previously served as executive vice president and CFO. Quebecor World would only say that Lucas was leaving the company to pursue other opportunities in the United States.

Last year definitely ended on a sour note for Quebecor World. Shareholders of Netherlands-based RSDB NV voted down the proposed C$341 million purchase of Quebecor World’s European printing business, leaving North America’s second-largest printer in precarious financial straits.

The company received conditional waivers from its lenders through March that require it to secure $125 million in liquidity by January 15 and provide a refinancing transaction by month’s end.

The commitments would lower Quebecor World’s current credit facility to US$500 million by February 29, repay its current facility and terminate its North American securitization program by June 30.

Adam Shine, an analyst for National Bank Financial, said in a report that, while a sale of the company remains the most logical solution, Quebecor World needs to resolve its credit issues first.

“There continues to be a growing possibility that Quebecor World could end up declaring bankruptcy,” the Canadian Press reported the analyst Shine as saying.

Most observers feel the best hope for the company is for parent Quebecor Inc. to throw a lifeline by either co-signing a loan for Quebecor World or simply providing the needed funds.

Quebecor World will continue to explore and evaluate financing and other alternatives to further strengthen its balance sheet and liquidity.