Quebecor World extends financing deadline

New York, Jan. 16 - Quebecor World Inc. said it extended the deadline to meet conditions for its C$400 million rescue financing with Quebecor Inc. and Tricap Partners Ltd.

Quebecor Inc. and Tricap have made progress on meeting the conditions and have "requested additional time to attempt to satisfy them," Quebecor World said.

The new deadline is 9 a.m. on Jan. 20, pushed back from 9 p.m. on Jan. 16.

Quebecor World previously said it accepted the C$400 million rescue financing proposal submitted by Quebecor Inc. and Tricap Partners, a private equity fund managed by Brookfield Asset Management Inc.

A special committee of the independent directors of Quebecor World concluded that accepting the proposal is in the best interests of the company and its stakeholders.

Under the financing, Quebecor World will receive an interim financing facility of C$200 million, which will be made available according to the company's cash flow needs, subject to receipt or waiver by 9 p.m. on Jan. 16 of the required consents and other agreements of the company's lenders and the sponsors of its securitization programs, a deadline subsequently extended.

By March 31, the interim facility will be replaced by a recapitalization plan made up of C$400 million of senior secured notes due 2012 to be issued to Quebecor Inc. and Tricap Partners and the issuance to Quebecor Inc. and Tricap Partners of subordinate voting shares representing 75% of Quebecor World's equity on a fully diluted basis.

Completion of the plan is subject to conditions, including the approval of the financing plan by holders of certain debt securities issued by Quebecor World, the conversion of all series 5 preferred shares and series 3 preferred shares into subordinate voting shares and receipt of all required regulatory and other approvals and settlement of definitive documentation.

In addition, the rescue proposal specifically contemplates that the consent of Quebecor World's debt securities maturing in 2008, 2013 and 2027. Quebecor Inc. and Tricap Partners have informed Quebecor World that they intend to commence discussions with these holders immediately.

Quebecor Inc. is the controlling shareholder of Quebecor World, with 84.5% of the voting interests and 35.5% of the equity interests in the company.

Quebecor World also said it has asked its lenders and sponsors to extend the waivers until Jan. 21 the deadline for receiving $125 million of new financing.

Quebecor World also previously said it did not make the $19.5 million coupon payment due Jan. 15 on its $400 million 9¾% senior notes due 2015.

The Montreal-based company has a 30-day grace period before a default occurs.

Quebecor also said that it did not meet the Jan. 15 deadline to raise $125 million of new financing as required by the terms of the waivers from its banking syndicate and the sponsors of its securitization program.

The failure does not automatically result in the termination of the banking syndicate's waiver or an acceleration of the maturity of indebtedness under the company's credit facilities or a cross-default on other financial instruments, Quebecor World said.

Termination, acceleration or default would require formal notification from a majority of the banking syndicate to Quebecor World.

However the sponsors are entitled to terminate the securitization program.

Quebecor World said it has requested a one week waiver to help a rescue financing currently being put in place but has refused to pay "the significant waiver costs" requested by the banks, saying it believes it must preserve cash.

Instead it has renewed its request for "a suitable waiver."

Montreal-based Quebecor World provides marketing and advertising solutions to retailers, catalogers, branded-goods companies and other businesses, as well as complete, full-service print solutions for publishers.

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