Monday, March 19, 2012

YRC Back at Brink 2 Years After Goldman Spat

Two years after the Teamsters union faced off against Goldman Sachs Group Inc. to keep YRC Worldwide Inc. out of bankruptcy, the second-biggest U.S. trucker is back on the brink.

Credit-default swaps tied to the company, whose units include New Penn, Holland and Reddaway, imply an 87 percent chance of default, according to data provider CMA. Bonds from Overland Park, Kansas-based YRC, which employed 32,000 on Dec. 31, have lost 50 percent of their value in six months.

Even as a strengthening U.S. economy boosts profits at FedEx Corp. and Con-Way Inc., YRC is set to lose $68.6 million this quarter, according to the average estimate of four analysts surveyed by Bloomberg, which would be its eighth loss in nine periods. Its competitors grabbed market share by lowering prices and attracting customers after YRC averted bankruptcy in 2009 through a debt exchange with a face value of $470 million. YRC’s revenue fell to $4.9 billion last year from $9.9 in 2006 while long-term borrowings rose.  Full Story.....

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