Financing for Quebecor

-- Graphic Arts Online, 1/14/2008 10:55:00 AM

Quebecor World, Montreal, reports it will get CD$400 million (US$393 million) in rescue financing by its parent company Quebecor Inc. and Tricap Partners, a private equity fund managed by Brookfield Asset Management Inc. The companies said each would provide CD$200 million

However, the financing is subject to several conditions being met, including the consent of Quebecor World's banking syndicate. The banks, led by Royal Bank of Canada, had asked the printer to come up with US$125-million in new financing by Jan. 15, but specified it was to be unsecured money. (e-GAM 1/7/07)

Sources familiar with the deal said the new financing would be secured and rank below the company's securitized assets and senior secured notes and above existing unsecured bank debt, according to several newspaper reports.

The investment would be convertible into equity that would give Tricap and Quebecor between 50% and 70% of Quebecor World, massively diluting shareholders other than Quebecor Inc., which owns 36% of the equity but controls the printer through voting shares.

Shares of Quebecor World fell 25% on Friday after the report.