Is Quebecor cooling to the printing business?

Andrew Willis of the Globe and Mail has an interesting posting on the Streetwise blog about Quebecor World, the massive printing arm of Quebecor Inc. Essentially, he is saying that recent actions of the parent company means it is leaving its printing subsidiary to twist in the wind. (See earlier post for background)

The oldest adage in business journalism is, follow the money. Doing so at Quebecor leads to interesting conclusions about the future of the media company’s stake in Quebecor World.

Willis points out that the company is investing most of its cash in its Nurun interactive media division rather than bailing out Quebecor World. QW has told preferred shareholders they have until the day after Boxing Day to convert their preferred shares (which stopped paying dividends last month) to common shares. The result would be to dilute the common shareholders by 66 per cent.

The harsh reality for Quebecor appears to be the view that printing is part of its past, while subsidiaries such as Nurun are the future. The parent company seems prepared to accept massive dilution on its stake in Quebecor World, and quite happy to let the printer refinance its debts on its own in 2008.