Quebecor World shares dive as financial woes mount
By Wojtek Dabrowski
TORONTO (Reuters) - Shares of battered commercial printer Quebecor World Inc lost more than half of their value on Wednesday as investors waited for word from the company's banks as to whether they will force it to seek protection from creditors.
The sharp drop in its share price came after Quebecor World revealed Tuesday night that it had failed to obtain $125 million in new financing that its banks had demanded.
"It's really up to the banks," said an analyst who spoke on condition of anonymity. "It's the banks' call."
Quebecor World, around which insolvency fears have continued to swirl in recent weeks, also said it would not make a $19.5 million interest payment on its $400 million 9.75 percent senior notes due 2015. The interest was due Tuesday.
It shares dropped 29 Canadian cents, or 62 percent, to 18 Canadian cents on the Toronto Stock Exchange. They are now worth a shred of their value from last February, when they changed hands at C$17.25 each.
The company is also trying to convince its banks to approve C$400 million of rescue financing from its parent, media group Quebecor Inc, and a private equity fund managed by Brookfield Asset Management.
Quebecor World prints products such as books, magazines, advertising inserts and direct-mail material. It has about 28,000 employees around the world.
It said the failure to obtain the $125 million in new financing or make the interest payment on the notes did not result in an immediate default. Continued...