Business

Quebecor World Inc has failed to raise the £63.7m ($125m) of new financing required to meet the conditions of a waiver its creditors granted a fortnight ago.

The future of the company is now firmly in the hands of its creditors, who will have to decide whether to accept an extension of the waiver requested by the company or take further action to recover the debt.

Quebecor World said in a statement: "The non-satisfaction of this condition of the 31 December 2007 waiver does not automatically result in the termination of the banking syndicate's waiver or an acceleration of the maturity of indebtedness... of Quebecor World."

However, Quebecor Inc, Quebecor World's parent company, and Tricap Partners, an asset management company, had offered a refinancing package of £200m (CA$400m) to the banks, which, in light of last night's statement, was apparently rejected.

It is thought that the lending syndicate was unhappy that the investment by Quebecor Inc and Tricap would have prioritised repayment to them over the syndicate in the event of bankruptcy. The perception was that this would leave the syndicate in a worse position than before to recoup their funds following the investment.

Quebecor World has said that, in light of the rejection of the proposal, it will not make the £10m payment of interest due today on its outstanding £204m debt issue, although it has 30 days to pay the sum before it is in arrears.

Unite assistant general secretary Tony Burke said this was an "unbelievably worrying time for our members and their families at Corby and the workforce throughout Europe".

He added: "At the moment, no one seems to be running the [Quebecor] operation in Europe. We are not getting any answers from local management throughout Europe who seem to be completely in the dark at present.

"The meeting in Geneva on Friday is vitally important and Unite is pushing strongly for a meeting with Quebecor at the most senior level to give us some clarity about what is going on and where we are likely to be in the future."

Quebecor World now faces a nervous time as it awaits the banks' decision on its future. Should a further waiver be granted, it would be up to its parent company to improve the offer or find new investors.

A dangerous game of chicken is developing in which there may be no winners. Should the company be forced into bankruptcy, its creditors would sell off its assets to recoup the funds.

Quebecor's shares fell to 24p in anticipation of the news, which came after close of trading. A year ago, they were changing hands at around £9.