Well! This is unexpected! Quebecor has announced:
Quebecor World Inc. (TSX: IQW, NYSE: IQW) (the “Company”) announced a refinancing plan today pursuant to which it intends to concurrently:
…
[Raise a lot of debt & equity money – JH]
…
The net proceeds of the Senior Note Offering and the Convertible Debenture Offering and a portion of the net proceeds of the Equity Offering will be used to repay indebtedness under the Company’s credit facilities and the Company intends to use the remaining net proceeds of the Equity Offering to redeem its Series 5 Cumulative Redeemable First Preferred Shares for an aggregate redemption price of Cdn$175 million (approximately $185 million) plus accrued and unpaid dividends. The redemption of these preferred shares is conditional upon the completion of each of the elements of the refinancing plan and subject to re-confirmation by the Company’s Board of Directors.
I was expecting direct conversion:
The thing that makes this situation so fraught with interest is that IQW.PR.C is currently quoted at $23.35-50 and has actually declined in price recently (it was trading just under $25.00 a month ago). Note that 23.50 is 94% of par value.
We can assume the company will convert to common. They don’t have any money and they don’t want to pay the pref dividends. If I’m wrong on that one and they convert to cash, well, that’s $1.50 profit to today’s buyer, so don’t complain to me.
Given recent prices and Quebecor’s recent downgrade, I don’t think there will be many complaints!
[…] The previously noted potential redemption of IQW.PR.C, which was conditional on successful financing, will presumably not take place. […]