A rather sad press release today:
Equitable Group Inc. (“EGI”) (TSX:ETC) announced today that it currently holds, as part of its investment portfolio, 207,000 preferred shares Series 5 of Quebecor World Inc. (IQW.PR.5). The book value of the holding is $5.2 million. EGI anticipates an impairment charge will be taken on this investment for the period ended December 31, 2007 due to the recent market activity of the IQW.PR.5 preferred shares. The impact on net income of a full write down of this investment is estimated to be $3.1 million ($0.24 per share). EGI’s total preferred share investment portfolio as at September 30, 2007 was $170.3 million.
So they had a book value of $5.2-million and are taking a write-down of $3.1-million, with 207,000 shares held. The $3.1-million must be after tax, because if it’s pre-tax, they’re keeping them on the books at $10 per share, which – to me – sounds pretty hard to justify.
In other news today, Andrew Willis of the Globe has posted some gossip:
Sources close to the deal said Quebecor and Tricap are giving ground on demands that their new loans rank ahead of the company’s bank debt, and are showing a willingness to refinance the company on terms that put them on more equal footing with long-time lenders. There is also talk that a new bank may be willing to step in and help refinance the company, which is staggering under $2.5-billion of debt.
“The original rescue package was never going to fly. It gave too much to Quebecor and Tricap. There are now more palatable options being discussed,” said one source working on the deal. However, other fixed income experts said Tricap will only make minor concessions before walking away.
The prior PrefBlog post regarding this saga was regarding the possible TSX delisting.
[…] The prior post in this saga was posted last Friday. […]