Possible QW Fall Out
This Quebecor World fall out conceivably could have a more significant impact on the printing and publishing industries in 2008 than the economy teetering on the brink of a recession. Certain segments of the market might in fact benefit from the expected aftermath of the collapse of this printing heavyweight.
Every printing trade journal has reported on the saga of Quebecor World leading to its current protection under bankruptcy laws. Rather than bludgeon the actions leading up to this hiatus, this article will discuss some possible courses of action that the various stakeholders may be entertaining or be subject to and the longer-term impact Quebecor’s financial woes might have on the structure of the print buyer-printer relationship.
Will there ultimately be dissolution? Wrong question. Too many vested interests will probably artificially prop up this house of cards until select plants can be spun off to service these large market movers. This article will hypothesize what these vested interests might be attempting to accomplish and their potential negotiating strategies.
There has never been a firm as big and significant to the printing industry as Quebecor World to be in this deep trouble. Despite annual sales cascading for most of the decade, QW’s 2007 revenues are expected still to register nearly $US6 billion for the 120 plants in 17 countries on four continents. Credit ratings have consistently been lowered with the 2006 annual report indicating debt and lease obligations en toto of $US3.6 billion. This hemorrhaging is not expected to go on much longer before customers force a restructuring since long term debt principal repayment has $US225.7 million scheduled for 2008 and $US674.5 million due in 2009.
