Quebecor World Sells European Operations

MONTREAL—The deal that might have prevented Quebecor World from entering bankruptcy protection appears to be finally consummated.

The financially troubled printer has signed a definitive purchase agreement for the sale of its European operations to Hombergh/De Pundert Group (HHBV), a Netherlands-based investment group. The transaction is valued at approximately 133 million euros (about US$206.5 million) and is expected to close by the end of June.

Last December, Quebecor World thought it had an agreement with RSDB for a sale price of US$213 million, but that deal was squelched by RSDB shareholders. That transaction would’ve given Quebecor World about a 30 percent stake.

With this agreement, HHBV will assume approximately US$100.9 million of net debt, and a US$32.6 million five-year note bearing interest at 7 percent per year which will remain payable to Quebecor World post-closing. The sale is being made substantially on an “as is, where is” basis and will provide net cash proceeds of US$72.2 million for Quebecor World, less certain customary deductions and expenses permitted by its debtor-in-possession (DIP) credit facility, which are intended to be used by Quebecor World to partially reimburse indebtedness.

“The sale of our European operations is an important step in our restructuring activities that we believe should enable us to exit creditor protection in North America as a stronger player in our industry,” said Jacques Mallette, president and CEO of Quebecor World. “I would like to thank our European customers and employees for their support and assure them that we intend to assist HHBV in ensuring a smooth transition. We also look forward to continue servicing our European customers’ needs in North America and Latin America.”

Quebecor World’s European operations currently include 17 printing and related facilities employing approximately 3,500 people in Austria, Belgium, Finland, France, Spain and Sweden.