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.
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.
Dec. 18 (Bloomberg) -- YRC Worldwide Inc. has less than two weeks to persuade bondholders to accept a debt exchange and prevent a bankruptcy filing that its employees’ union says may force the biggest U.S. trucking company to liquidate.
YRC, which has pushed back the deadline for the swap three times this month, must complete the tender by Dec. 31 to avoid a $19 million payment of interest and fees that would leave the trucker in an “unsustainable” position, the Overland Park, Kansas-based company said yesterday in a regulatory filing.
Bonds and shares fell yesterday as the company, which posted more than $1.7 billion in losses in the past five quarters, said the percentage of creditors who agreed to the exchange fell to 57 percent from 75 percent on Dec. 15. YRC, facing a slump in freight demand, is locked in a struggle with a group of bondholders who own derivatives that would profit if the company defaults, people familiar with the situation say.
“Bondholders are in the driver’s seat,” said David Ross, a Baltimore-based analyst at Stifel Nicolaus & Co. who has a “sell” rating on the stock. “They could force the company to file if they don’t tender enough notes, and then there is a high chance the business is liquidated.”
Dec. 15 (Bloomberg) -- YRC Worldwide Inc., seeking to avoid bankruptcy by exchanging equity for debt, faces resistance to the swap from investors holding bonds and derivatives that pay out in a default, according to people familiar with the matter.
YRC Worldwide's banking group came to the troubled carrier's rescue today, extending its credit agreement until Jan. 12 and effectively giving YRC another month to complete a debt-for-equity swap with bondholders key to its plans to avoid bankruptcy.
In their thirteenth amendment to the credit agreement since 2007, the banking group agreed to continue to let YRC draw up to $50 million at any time from its $950 million revolver reserve block, and it suspends a minimum cash requirement through Jan. 11.
That pushes off concern over a near-term bankruptcy filing by the carrier, which has lost more than $2 billion over the past two and a half years. The company detailed the credit amendment in a Dec. 16 filing with the Securities and Exchange Commission.
YRC is wrestling with reluctant bondholders as it struggles to complete a debt-for-equity swap that would wipe $536.8 million in debt from its books.
As of Dec. 15, 75 percent of the bondholders had agreed to the exchange, but the tender offer requires 95 percent of the note holders to swap their bonds for company stock.
Dec. 16 (Bloomberg) -- The International Brotherhood of Teamsters blamed Goldman Sachs Group Inc. for making derivatives trades that would benefit from the bankruptcy of YRC Worldwide Inc., the biggest U.S. trucker by sales.
Dec. 15 (Bloomberg) -- YRC Worldwide Inc., seeking to avoid bankruptcy by exchanging equity for debt, faces resistance to the swap from investors holding bonds and derivatives that pay out in a default, according to people familiar with the matter.
YRC Worldwide warned it may not reach its second quarter earnings requirement as the fragile financial standing at the nation’s largest heavy-freight trucking company seems to be getting shakier.
One Wall Street analyst is not optimistic about YRC’s recovery chances in the thick of a recession.
“We have a difficult time seeing how the math works here to restore the company to profitability,” said David Ross of Stifel Nicolaus. “It has already had its employees take a 10 percent wage cut. Plus, we do not see industry volumes rebounding this year, and industry pricing remains very competitive.”
