Quebecor World gets another 30 days to negotiate final DIP agreement

By Rebecca Melvin

New York, March 10 - Quebecor World (USA) Inc. received bankruptcy court permission for an additional 30 days to negotiate final terms of a $1 billion debtor-in-possession loan facility, according to a company release Monday.

Of the $750 million of DIP financing that was approved by the court on an interim basis, the printing and marketing company still has more than $350 million of financing available as of March 7, the release sad. That amount includes more than $225 million of cash on hand and more than $125 million of additional borrowings available.

The extension for final approval comes after the company failed to negotiate an agreement of terms late last week with the official committee of unsecured creditors, which objected on a number of issues including the amount of power the tentative agreement affords to the lenders.

The creditors want to modify the final DIP to specify that neither lenders' liens and claims nor the adequate protection liens or superpriority claims can be satisfied from avoidance actions of their proceeds.

Counsel for the unsecured creditors committee, David Botter of Akin Gump Strauss Hauer & Feld LLP, declined to comment on the case on Monday due to the sensitive nature of negotiations underway. But he said during a hearing on the matter on March 6 that wording in the agreement could affect as much as $470 million in lawsuit proceeds.

A new hearing date on final DIP approval has not been scheduled.

The Montreal-based printing company filed Jan. 21 for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York and for protection under the Companies' Creditors Arrangement Act in Canada. Its Chapter 11 case number is 08-10152.

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