Publishers have been keeping a careful watch as Quebecor World, one of North America's largest book printers, explores ways to strengthen its sagging balance sheet. The company thought it had addressed its liquidity problems late last year with the sale of its European operations, but the deal fell apart in December. Earlier this month, a C$400 million “rescue financing” plan was negotiated between Quebecor World and its majority shareholder, Quebecor Inc., and the private equity firm Tricap Partners. The parties hoped to reach a final agreement by January 20.
But whether the refinancing is successful or not, “our plants will continue to operate and we will continue to deliver for our customers,” promised Sean Twomey, senior v-p, market development, for Quebecor World. Currently, Twomey noted, “All our book and directory facilities are operating,” adding that sales and earnings for the book division were up in 2007. Twomey said Quebecor World is committed to the book industry, having just completed a three-year, $100-million retooling of its book printing facilities. Quebecor World has kept its customers informed of the refinancing discussions, and no publishers have jumped ship, according to senior v-p for sales Gary Brusseau.
Several Quebecor World clients contacted by PW said they have continued to do business with the printer, but acknowledged making contingency plans in case Quebecor World's financial problems worsen. Twomey reiterated that even if the latest refinancing deal fails, its plants will continue to operate. Twomey said to date, Quebecor World has received good support from its customers and suppliers. Publishers have good reason to support Quebecor World for as long as they can; as one large publisher noted, “The last thing we need is more consolidation among printers.”
