Trucking company YRC Worldwide has narrowly avoided bankruptcy by exchanging $470 million in debt for stock and deferring about $19 million in loan interest and fees for the fourth quarter. Reuters has the scoop:
U.S. trucking giant YRC Worldwide said on Thursday it averted bankruptcy by successfully negotiating a critical debt-for-equity exchange that wipes out $470 million in debt and gives the struggling company access to needed credit as it restructures. The company said holders of 88 percent of the company’s outstanding notes had agreed to the swap, including 70 percent of YRC’s 8-1/2 percent notes. It was that group of noteholders who had been holding up the exchange, and who have been publicly pressured in recent days by the company’s union to agree to the deal.
“This doesn’t guarantee them survival but it gives them a shot,” said Dahlman Rose analyst Jason Seidl. “They are still in a very difficult situation.”
YRC, which is the largest U.S. trucking firm handling smaller, or less-than-truckload shipments, has laid off thousands of workers and cut deals with labor and lenders over the last year trying to survive a downturn in the economy and a heavy debt load tied to a string of acquisitions.
The deal will give noteholders 94 percent of the equity in YRC, news that sent shares down to all-time low of 80 cents early Thursday.