Quebecor suppliers waiting for payment
8/14/01

Montreal - While Quebecor deals with class action lawsuits filed by former executives in the company, including from former Vidéotron ltee president and COO Guy Beauchamp, suppliers to the Montreal cable giant are growing weary of waiting for payment on deliveries made.

"Their attitude is 'so what, sue us,'" one supplier who asked not to be named told Cablecaster about his company's wait to be paid for shipments.

"We've had a small outstanding amount for some time but they say they can't find the invoice or the equipment," said another supplier. "I said, here's the invoice number. I can even send you your purchase order and the invoice. The equipment is probably already in the system."

The Globe and Mail reported similar feelings out of Montreal, saying suppliers and contractors are going to court over alleged payment delays at Videotron cable and telecom operations.

It reported that one company, Novasys Inc., says in documents filed in Quebec Superior Court that Videotron owes it $242,107 but refuses to pay. Novasys makes on-line learning and management software. According to the Globe, Quebecor's statement of defense says it owes only $862 for a one-day training session provided by Novasys. The statement also says that a pair of longer-term projects failed to materialize and therefore no payment is required.

Quebecor spokesman Luc Lavoie told the Globe and Mail that the turmoil reflects the fact that Quebecor is trying to clean up a mess left by the former management which it inherited after taking over Videotron last year.

"We discovered that Videotron was probably the worst-managed company Quebecor has ever come across in its many years of acquisition," Mr. Lavoie told the Globe. He added there may be delays in payments because Quebecor is reviewing every single invoice and is overhauling a slipshod billing policy that automatically paid every invoice within 15 days.

In the story, Lavoie denied that the delays are because of cash-flow problems at Videotron.

The Globe quoted a former Videotron executive who said the delays or refusals to pay are part of a stringent campaign to slash costs and avoid a cash crunch at debt-laden Quebecor.

Lavoie also said Videotron Telecom is a particularly tough turnaround case because the company had diversified out of its core business of selling high-volume bandwidth for voice and data traffic to big commercial clients and was burning cash at a rate of $10 million to $15 million a month.

"In the 18 months leading up to February 27 (when Quebecor announced it was laying off 420 employees and installed new management), they burned $150 million," Lavoie told the Globe, and would have been bankrupt without Quebecor's backing, he said.

Several former executives at Videotron Telecom, have filed suits alleging they were fired without the full severance they were entitled to. Quebecor has not yet filed statements of defense regarding those suits.

Quebecor bought Videotron's cable and telecom assets, as well as TVA Group, the province's largest private television broadcaster, for $5.4-billion in cash last year after a bitterly fought takeover battle against founder Andre Chagnon and the bidder he supported, Rogers Communications Inc.


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