A U.S. court approved a $750 million credit line to Quebecor World Inc. so it can keep its printing presses rolling and its employees paid as bankruptcy proceedings begin.
The company employs about 28,000 people worldwide and runs a 900-person print shop in Merced, though local operations haven’t been hampered, corporate spokesman Tony Ross said. “It’s business as usual,” he said. “We’re continuing to service all our customers.”
Quebecor World launched an extensive communications campaign Monday with its employees to explain the ins and outs of what’s happening at corporate headquarters, he explained.
Locally, business is also running smoothly and there haven’t been any changes, said a Merced plant leader, who asked to remain anonymous because of the company’s media policy.
The multinational company filed for bankruptcy protection in the United States and Canada because it ran out of cash and couldn’t come up with new financing from banks, worried about the company’s stability.
The company will need about $1 billion while it restructures and reorganizes through the bankruptcy proceedings, which Ross said will take several months.
A company report forecasts spending through April, based on revenues and the loaned cash.
Credit Suisse and Morgan Stanley have both promised to provide the needed financing while Quebecor World restructures. The company has assets worth about $4.2 billion.
All options to increase the company’s efficiency and long-term stability will be considered, Ross said, including another attempt to sell the European printing division, which failed last year and added to company woes.
Ross wouldn’t talk about specific plans or speculate on what may happen.
Though the company may have hit close to bottom, the spokesman said it will rebound even more robustly. “We expect expect to emerge as a strong company,” Ross said.
Canadian Judge Robert Mongeon said it was urgent to approve the bankruptcy filing and cash infusion because the company “would be literally out of cash to pay its employees and day-to-day operations” by Thursday, according to a court transcript.
The printing company’s parent company, Quebecor Inc., issued a statement Monday explaining that its business won’t be affected by the affiliated company’s problems. However, it also asked that the printer remove the word “Quebecor” from its corporate name to eliminate any confusion among the public about the difference between the companies.
Reporter Scott Jason can be reached at 209 385-2453 or firstname.lastname@example.org.