Tuesday, May 03, 2011

YRC restructuring infuses company with millions in capital

Deal will drive down value of company's existing shares.

YRC Worldwide Inc.'s long-awaited next step in its restructuring plan, announced late Friday, infuses the troubled less-than-truckload carrier with more than $100 million in needed liquidity. The deal, however, will dilute the value of the company's existing stock to just pennies per share.

The agreement, approved virtually unanimously by the company's lenders, multi-employer pension funds, and the Teamsters union, also calls for YRC's debt-holders to exchange $165 million in debt for a 72.5-percent equity stake in the company. Under the plan, the company's 25,000 Teamsters members will retain a minority equity ownership in YRC.

In a statement, John Lamar, YRC's chief restructuring officer, said the agreements set a "solid foundation for long-term success." Lamar said the company remains on track to complete the comprehensive restructuring by the end of July. Full Story.......