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Employee takeover of insolvent Quebec media group at risk of collapse

A selection of newspapers owned by Groupe Capitales Médias (GCM) are pictured in Montreal on Monday, August 19, 2019.
A selection of newspapers owned by Groupe Capitales Médias (GCM) are pictured in Montreal on Monday, August 19, 2019. Paul Chiasson/The Canadian Press

Employee efforts to take over an insolvent Quebec newspaper group are at risk of falling apart despite support from the Quebec government.

Desjardins Group has walked away from a project to support Groupe Capitales Medias, a move that has prompted union institutional investor the Solidarity Fund to question its own participation.

READ MORE: Quebec to come up with plan for failing newspapers

Desjardins, the Solidarity Fund and another union fund, Fondaction CSN, were approached to finance the project against another offer from Metro Media.

Trustee PricewaterhouseCoopers will make its recommendations to the Quebec Superior Court on Wednesday.

READ MORE: Quebec to give $5M in emergency funding to newspaper chain

Sheltered from creditors since August, Groupe Capitales Medias has some 350 permanent employees and publishes regional dailies Le Soleil, La Tribune, La Voix de l’Est, Le Droit, Le Nouvelliste and Le Quotidien.

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Investissement Quebec, a government agency, has already loaned the company about $15 million. Economy and Innovation Minister Pierre Fitzgibbon said he hasn’t closed the door to another contribution even though the initial loan is unlikely to be repaid.

READ MORE: Stanstead Journal, Quebec’s oldest weekly newspaper, scales back publication

Fitzgibbon said between $10 million and $15 million more would be required, along with money promised from the federal government.