YRC reverse stock split

The proposed 25 for 1 reverse stock split of YRCW stock took place today.

The new symbol is YRCWD, and opened at 6.00 a share.

From The Journal of Commerce

Without the reverse stock split, YRC Worldwide faced delisting by the Nasdaq stock exchange, which requires companies to maintain a $1 minimum share value.

For most of the year, YRC's stock traded between 76 and 11 cents a share, hovering in the 20-40 cent range in recent weeks. A year ago it traded at $4.45 a share.

click here for link to article

Teamsters Union in talks with YRC

Least anyone think I bash all Unions (after the previous 3 posting), I have something good to say about the latest actions of the Teamsters.

They appear to be living in the "real world", and over the last year have been trying to keep YRC out of bankruptcy.

From The Journal of Commerce

Proposed agreement on pensions, wages would give union broad veto power over management decisions

The Teamsters union is offering to extend its current contract with YRC Worldwide for two years and accept dramatically reduced pension contributions in return for an unprecedented say in the management of the nation's largest trucking operator.

The union would extend the current suspension of pension contributions, set to expire Dec. 31, until May 31, and then require the company to resume contributing to its multiemployer pensions at 25 percent of the rate in effect in July 2009.

The union proposal also would make significant changes to YRC's work rules and make them uniform across all of its regional and supplemental agreements — a major issue for the company, which deals with several bargaining units.

The agreement would extend the National Master Freight Agreement until 2015. Wage increases already scheduled for 2013 and 2014 would take place, but wage levels would be cut by 15 percent, matching the levels agreed to last year.

The company's board agreed to the plan, which now must be approved by YRC Worldwide's Teamsters employees. A vote by the Teamsters rank-and-file is expected later this month. The concessions are aimed at helping the struggling company avoid potentially crippling pension costs and survive 2011.

In return, the Teamsters National Freight Industry Negotiating Committee would receive effective veto power over the company's plans to recapitalize and over any transactions that may occur in the restructuring of YRC Worldwide.

And, from Bloomberg News

YRC Worldwide Board of Directors Approves Tentative Labor Agreement and
Reverse Stock Split

YRC Worldwide averts bankruptcy

This is just too weird.

From Bloomberg

Jan. 1 (Bloomberg) -- Goldman Sachs Group Inc. helped YRC Worldwide Inc. complete a debt swap to avert bankruptcy after the Teamsters union said the bank was trying to profit from a failure of the largest U.S. trucker by sales.

A group consisting of Goldman Sachs, Deutsche Bank AG, Aristeia Capital LLC, Silverback Asset Management and a Smith Management LLC unit, “got us over the goal line by going into the market, buying bonds and tendering them,” YRC Chief Executive Officer Bill Zollars said yesterday.

For those of you who have not followed this saga, here it is in a nutshell.

YRC Worldwide is in financial difficulty. They offered a deal to the bondholders to swap bonds for stock. But, sometime during or before this offer went out (who knows the truth) Goldman Sachs started selling credit default swaps to bondholders, so if YRC Worldwide did go bankrupt, the bondholder would be covered.

So when YRC Worldwide made the swap offer to the bondholders, they couldn't get enough of the bondholders to agree for the deal to go through.

When James Hoffa (son of Jimmy Hoffa), who is president of the Teamsters Union (which represents the truck drivers of YRC Worldwide), got wind of what Goldman Sachs had done, he said some rather unkind things. I believe he also tried to get Congress to do something (good luck there).

Anyway, long story short, apparently there was sufficient pressure to persuade Goldman Sachs to have a change of heart. They bought up bonds to be tendered so the swap could go through,and YRC Worldwide averted bankruptcy.

Now, Goldman Sachs looks as if they were the good guy, but just remember, someone would have had to pay on the credit default swaps if YRC Worldwide had gone bankrupt, so they actually probably made out better in the end. Plus, no telling how much they made on commissions with all the transactions.

And, now they are friends with James Hoffa.

Humm.

Interesting story.

Maybe it will become a movie.