Business

Quebecor World has been granted creditor protection via a companies’ creditors arrangement act (CCAA) for its Canadian operations, foll-owing weeks of financial turmoil that culminated in a rejection of a refinancing package by its syndicate of lenders.

A court hearing in Canada on Monday heard how the printing giant was overdue on more than $100m (£50m) in trade payables, and how “several hundred” suppliers are chasing the company for funds. In addition, the firm is $413m behind in its securitisation payments.

Derrick Tay, a lawyer for Quebecor World, told the court: “We are days from a total liquidity collapse. If the company doesn’t get the emergency debt financing it is seeking, it will run out of cash by Thursday.”

The company was plunged into financial turmoil having failed to refinance in Nov-ember last year, due in part to the adverse credit conditions heralded by the credit crunch, and hopes of a rescue were scuppered when Roto Smeets’ owner, RSDB, rejected the merger in December last year.

Quebecor World has also entered into an arrangement with Credit Suisse and Morgan Stanley for $1bn to continue its operations in the short term.

The financing package, known as debtor in poss-ession (DIP) finance, provides the company with funding to meet immediate requirements. Ernst & Young, appointed to oversee the protection process, told the court in Canada the company requires up to $548m funding for the coming week.

Jacques Mallette, Quebecor World president and chief executive, said: “The filing is the result of industry pressures, particularly in Europe, combined with the inability of the company to raise new capital, and the inability to complete the sale of its European operations.”

An application for Chapter 11 has been filed in the US to cover its US operations, which was pending approval as PrintWeek went to press.