Business

Printing giant Quebecor World is facing a battle against bankruptcy following the collapse of the sale of its loss-making European division to RSDB, the parent company of Roto Smeets.

The abandonment of the deal, which came after a shock refusal of the acquisition by Roto Smeets shareholders last Thursday, has thrown into doubt the future viability of Canadian-owned Quebecor World.

The decision sent shares in Quebecor World into freefall and led to the resignation on Monday of Quebecor World’s sixth chief executive since 2003, Wes Lucas.

Lucas’ departure came as the company’s shares dropped to a record low of $1.18, having traded at over $8 dollars in November and $17.25 in February.

As PrintWeek went to press, details were emerging of separate interest in a bid for the company from RR Donnelley and two private equity houses, Cerberus and KKR, the owner of Boots.

However, the situation at Quebecor World’s only UK site in Corby, Northampton­shire was said this week to be “business as usual” by Quebecor World’s UK sales and marketing director Angus Jurkschat.

In the £129m deal, Quebecor World’s European operations would have merged with Roto Smeets under the brand Roto Smeets Quebecor, making it the continent’s biggest long-run gravure and web offset group.

According to Canadian financial analysts, Quebecor Inc, the Montreal-based media group which owns Quebecor World, is now faced with three options for the future of the print group: take the business private or sell all or part of its assets; refinance the business; or file for bankruptcy protection.

Adam Shine of National Bank Financial said that there was a “growing possibility that the company could end up declaring bankruptcy,” a view backed up by BMO Nesbitt Burns analyst Tim Casey.

Shine said: “Is bankruptcy a realistic possibility for [Quebecor World], whose probability is also rising? We think yes, but the company still has many levers to pull and avenues to pursue before succumbing to credit protection.”

The possibility of a refinancing looks unlikely, not least as the group tried but failed to refinance its debts last month.

RSDB chief executive John Caris expressed confusion over the shareholders’ refusal to ratify the bid. He said: “We are really not sure why the shareholders voted against the bid. Up until last week, there was strong support for the bid”

Tony Burke, assistant general secretary of union Unite, said: “This decision is a real concern to our members and their families. It comes at a time when we thought we had achieved stability, particularly for our members at Corby.”