Quebecor World Faces Financial Woes

MONTRÉAL—With its stock value plummeting and a weak credit market causing it to nix a refinancing plan, Quebecor World appears destined for major changes in 2008.

The venerable printer sold a majority share of its European operations to RSDB Group in a deal with a total value of U.S.$341 million. Under terms of the transaction, Quebecor World will retain a 29.9 interest in the new company, which will be called Roto Smeets Quebecor (RSQ) and listed on the Euronext Amsterdam. In all, Quebecor World will receive $213 million in cash, a $50 million note and 1.4 million shares.

Quebecor World’s European operations include 18 printing and related facilities employing about 4,000 people in Austria, Belgium, Finland, France, Spain, Sweden and the United Kingdom.

The deal, which is subject to approval of RSDB shareholders and the European Commission, is slated to close by the end of the year.

On the eve of a refinancing program in late November, Quebecor World had to back away from a plan to offer C$250 million worth of shares, C$500 million in new debt securities and amendments to secured debt. The company gave the official reason as “adverse financial market conditions.” The company is expected to conduct a review of strategic alternatives.

On the day before Thanksgiving, the company’s shares on the Toronto Stock Exchange sank 9 percent and its stock value, more than C$3 billion about five years ago, now stood at roughly C$212 million, the Canadian Press reported.

In an unrelated move, Quebecor World shuttered its Vancouver plant, resulting in the loss of 220 jobs.