Quebecor World Inc. has declared bankruptcy in the United States and the equivalent in Canada, the company announced Monday morning.
Quebecor’s former Kingsport book printing operation closed in 2006. The operation originally was the Kingsport Press, and Quebecor gave the city the downtown plant of about 1 million square feet.
The company, which trades under IQW in the Toronto and New York stock exchanges, announced Monday that the board of directors of the company has authorized it to file for creditor protection under the Companies Creditors Arrangement Act of CCAA in Canada.
A number of Quebecor World’s U.S. subsidiaries are also covered by the CCAA filing in Canada as well as in the United States under Chapter 11 of the United States Bankruptcy Code. Application under the CCAA was heard by the Quebec Superior Court Monday, and the filing under Chapter 11 of the U.S. Bankruptcy Code will be made in the Southern Judicial District of New York.
A news release said Quebecor’s board, in a unanimous decision, authorized the company to take this action as the best alternative for the long-term interests of the company, its employees, customers, creditors and other stakeholders. Operations outside of North America are not included in these filings.
The company has also announced that it has entered into financing commitments with Credit Suisse and Morgan Stanley for new financing of $1 billion. This financing, which is subject to approval of courts in both Canada and the United States, will allow the company to meet all current operating needs, including wages, benefits and other operating expenses.
“These steps allow the company to continue operating as a going concern for the benefit of all those affected including our many loyal employees, customers and suppliers,” said Jacques Mallette, Quebecor World’s president and CEO. “The company has a strong business and valuable assets located throughout the world. We believe that the steps we are taking today and the strong vote of confidence given to us by our new finance lenders will ensure that we will be able to protect the value of the business for our stakeholders.”
The announcement came after the passing of the 9 a.m. Sunday deadline for satisfaction of the conditions precedent to the previously announced $400 million in Canadian rescue financing agreement with Quebecor Inc. and Tricap Partners Ltd.
Quebecor provides marketing and advertising including advertising inserts and circulars, catalogs, direct mail products, magazines, books, directories, digital pre-media, logistics and mail list technologies, as well as printing for publishers. The company has about 28,000 employees working in more than 115 printing and related facilities in the United States, Canada, Argentina, Austria, Belgium, Brazil, Chile, Colombia, Finland, France, India, Mexico, Peru, Spain, Sweden, Switzerland and the United Kingdom.