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December 19, 2007 |
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QUEBECOR WORLD: Aborts US$341MM Sale of European Assets to RSDB Quebecor World Inc. will not be proceeding with the sale of its European business to RSDB NV due to the lack of support of the transaction from RSDB's shareholders. In November 2007, Quebecor World and RSDB NV have signed a definitive share purchase agreement and implementation agreement to sell/merge Quebecor World's European operations to RSDB Group. RSDB will buy Quebecor World's European operations and Quebecor World will retain a 29.9% interest in the merged entity that will be named "Roto Smeets Quebecor" and will be listed on Euronext Amsterdam. Under the terms of the share purchase agreement and implementation agreement, RSDB will deliver to Quebecor World, at closing, cash, a note and shares valued in the aggregate at approximately EUR240 million or US$341 million, subject to certain post-closing adjustments. More specifically, the consideration payable to Quebecor World will be comprised of approximately EUR150 million or US$213 million in cash, a EUR35 million or US$50 million note, and 1.4 million shares in RSQ representing approximately 29.9% of the issued and outstanding shares of the combined business post- closing. The share purchase and implementation agreement was agreed to by both RSDB's management and supervisory boards but was conditional upon the approval of RSDB's shareholders. Notwithstanding the outcome of the RSDB's shareholders vote, Quebecor World believes that the overall terms of the transaction represented fair value for all affected stakeholders. The company will explore its strategic options for its European operations, including consolidation opportunities and other initiatives to enhance value. 'While we believed this transaction represented an important consolidation opportunity for the European industry, our European business remains a leader, with one of the most extensive and technologically advanced pan-European platforms," Wes Lucas, president and CEO Quebecor World, said. "Our customers will continue to receive top quality, on-time products and services each and every day as we are fortunate to have some of the most skilled and dedicated people in the industry." The company is evaluating and implementing a variety of options that should compensate for the sale proceeds that will no longer be realized as a result of this transaction not proceeding, including the implementation of new accounts receivable financing programs in Europe. Moreover, Quebecor World's management and board of directors, together with its independent financial advisor, explore and evaluate financing and other alternatives to further strengthen the company's balance sheet and liquidity. While recent external market conditions have been challenging, the company's completed retooling and turn-around plan are generating improvements and have contributed to ensuring the company's continued positive operating cash flow. About Quebecor World Inc. Headquartered in Montreal, Quebec, Quebecor World Inc. (TSX: IQW)(NYSE:IQW), -- http://www.quebecorworldinc.com/ -- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. * * * As reported in the Troubled Company Reporter on Nov. 29, 2007, Standard & Poor's Ratings Services lowered its preferred stock rating on Quebecor World Inc. two notches to 'C' from 'CCC-'. The company's other ratings, including the 'B-' long-term corporate credit rating, remain unchanged. All ratings are on CreditWatch with negative implications, where they were initially placed Aug. 9, 2007. |
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