IQW.PR.D : What's the story?

There was a post on the Globe site excitedly announcing that investors don’t much like the proposed restructuring plan … which I can’t say I find too surprising, given that indications are that it will wipe out the current equity owners. It also doesn’t surprise me much to see that IQW.PR.C is down a lot on the day … presumably, should the plan be executed, the controlling faction will first force conversion into SVS, prior to wiping out the SVS.

The IQW.PR.D, though, are more interesting, according to the prospectus:

The Series 3 Preferred Shares will not be redeemable prior to December 1, 2007. The Series 3 Preferred Shares will be redeemable, subject to applicable law and to “Restrictions on Dividends and Retirement of Shares”, on December 1, 2007 or on December 1 in every fifth year thereafter, at the option of the Company, in whole but not in part, at $25.00 per share in cash, plus an amount equal to all accrued and unpaid dividends up to but excluding the date of redemption. Notice of the redemption will be given by the Company not less than 45 days nor more than 60 days prior to the date fixed for redemption.

See that? Cash. Redeemable for cash. None of this SVS nonsense. This whole affair gets more interesting by the minute! However, the Quebecor press release states:

Completion of the recapitalization plan is subject to a number of conditions, including, but not limited to, 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 the holders of the Company’s debt securities maturing in 2008, 2013 and 2027 must be obtained and Quebecor Inc. and Tricap Partners have informed Quebecor World that they intend to commence discussions with these holders immediately.

So my question is … how many SVS per IQW.PR.D? And what if the IQW.PR.D holders Just Say No?

More than half of the IQW.PR.C are already being converted.

Update: National Post:

As of 5:30 pm, the company hadn’t revealed the outcome of negotiations with its bankers.

Update: National Post:

As of 6:20 pm, the company hadn’t revealed the outcome of negotiations with its bankers. Stay tuned for further developments this evening.

Update: Missed!

Quebecor World Inc. (TSX: IQW, NYSE: IQW) announced today that in connection with the waivers obtained from its banking syndicate and the sponsors of its securitization program announced on December 31, 2007, it has not obtained by January 15, 2008, US$125 million of new financing, as had been required under the terms of the waivers.

The Company had requested a one week waiver of this condition from its banking syndicate and securitization sponsors to facilitate the rescue financing initiative currently underway, but has declined to pay the significant waiver costs requested by its banking syndicate for this waiver, as the Company believes it must preserve cash and this payment would not be in the best interests of all of the Company’s stakeholders. The Company renewed its request that the banking syndicate provide a suitable waiver and is awaiting the response.

In addition, Quebecor World announced today that in light of the announced rescue initiative and its current circumstances, it will not make the US$19.5 million payment of interest due today on its outstanding US$400 million 9.75% Senior Notes due 2015.

Quebecor World continues to work with Quebecor Inc. and Tricap Partners Ltd. on the rescue financing plan announced on January 14, 2008 and believes that satisfaction of the conditions of such initiative would be in the best interests of the Company and all its stakeholders. There is no assurance all the consents and approvals to the completion of the rescue financing plan and recapitalization initiative will be received on a timely basis.


One Response to “IQW.PR.D : What's the story?”

  1. […] The last installment on the continuing Great Quebecor World Saga of 2008 was published here yesterday. […]

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