Quebecor World Files for Bankruptcy

Cormark Securities analyst David McFadgen officially shut the book on Quebecor World Inc. (IQW) coverage after the company announced earlier this morning that the rescue financing proposal from Quebecor Inc. and Tricap Partners was rejected by Quebecor World's lenders.

In a note to clients he said:

Accordingly, it will seek bankruptcy protection [CCAA] today. We are cutting our target from $C0.25 to NIL. Given the equity of Quebecor World is now basically worthless, we are dropping coverage of [it].

Quebecor World went into a tailspin after a refinancing effort fell apart, as did the sale of its European assets last month. Then, on New Years Eve, the 14 North American and European banks behind its $750-milllion line of credit demanded the company find $125-million in new, unsecured financing by Jan. 15, followed by a full refinancing plan.

Shares in the company were down almost 50% to C$0.17 at 10:38 a.m. E.T.