Quebecor World agrees to €133 million sale of European operations

By Caroline Salls

Pittsburgh, May 29 - Quebecor World Inc. has agreed to sell its European operations to Hombergh/De Pundert Group (HHBV), a Netherlands based investment group, for €133 million, according to a Quebecor World news release.

The sale is expected to close by the end of June.

Under the purchase agreement, HHBV has deposited €46.5 million in escrow to be released to Quebecor World at closing. This amount can be increased to cover all funds disbursed by Quebecor World to support any seasonal financing needs of the European operations between the signature date and closing.

In addition, HHBV will assume roughly €65 million of net debt and a €21.5 million five-year 7% note, which will remain payable to Quebecor World post-closing.

According to the release, Quebecor World will receive €46.5 million in proceeds, minus customary deductions and expenses permitted by its debtor-in-possession credit facility.

The company will use the sale proceeds to partially repay its DIP facility.

"The sale of our European operations is an important step in our restructuring activities that we believe should enable us to exit creditor protection in North America as a stronger player in our industry," Quebecor World president and chief executive officer Jacques Mallette said in the release.

Quebecor World said its European operations currently include 17 printing and related facilities employing about 3,500 people in Austria, Belgium, Finland, France, Spain and Sweden.

Quebecor World Europe produces magazines, catalogs, retail inserts, direct mail products, books and directories for many of the world's largest retailers, publishers and branded goods companies.

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

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