Financial Woes Rock Quebecor’s World —Michelson

“The long and short of it is that [Quebecor World] must raise nearly $1 billion in new financing within six months,” wrote Genuity Capital Markets analyst Carl Bayard, which “is quite a challenge in light of the current credit enviroment.”

As we closed this issue, some speculated that Quebecor World’s parent, Canadian publishing and media giant Quebecor Inc., would swoop in and provide a cash infusion, at least the $125 million covenant to avoid bankruptcy. This would buy Quebecor World a little more time to consider its options, which include selling select assets or even unloading the entire company to a strategic buyer or private equity firm. Possible suitors mentioned in the financial press include competitors RR Donnelley and Transcontinental Inc. (even though Transcontinental issued a statement saying it’s not interested), as well as private equity firms Kohlberg Kravis Roberts (KKR) and Cerberus Capital Management. Various debt and equity analysts polled have placed the value of Quebecor World at between five and six times EBITDA, or roughly $2.3 billion to $2.7 billion.