Was kommt da denn noch?Trucking company YRC Worldwide Inc. believes it has a new restructuring deal in place that will keep it in business.
The Kansas-based less-than-truckload operator, owner of the former Roadway business in Akron, has not released financial specifics of the plan.
But YRC executives said they have a nonbinding ''agreement in principle'' that will give the Teamsters union and YRC creditors significant additional ownership of the company as well as debt that can be converted into shares in upcoming years.
The deal was reached on Monday. The deadline to reach final details of the agreement is at the end of April, when specifics will be provided, a company official said.
Shareholder approval is also needed by July 22, YRC said in a regulatory filing.
This restructuring will bring new capital to YRC and ''more than adequate liquidity for the company,'' John Lamar, chief restructuring officer and lead director of YRC, told the Beacon Journal on Tuesday.
This is expected to be the fi
nal financial restructuring of YRC, Lamar said. ''It is rewarding to see us reach a very significant milestone.''
YRC said in a news release that ''the nonbinding term sheet provides [the company] with new and additional capital, a substantial improvement in its liquidity position, conversion of some of its debt obligations into equity and the replacement or restructuring of certain of its debt obligations. The term sheet contemplates a very substantial dilution of existing equity holders.''
The announcement caused shares of YRC to drop 40 cents, or 14.9 percent, to $2.28 on Tuesday, following a 21.6 percent drop Monday. Shares are down 38.7 percent since Jan. 1 and are down 79.3 percent from a year ago.
YRC executives successfully completed a $470 million debt-for-equity swap at the end of 2009.
Earlier this year, YRC executives said they were working on a plan to recapitalize the struggling company, which has been hurt by high levels of debt as well as a severe downturn in business during the recession. On Feb. 3, YRC Chief Executive Officer William Zollars told industry analysts that while he would not provide any details, the Teamsters would be a part of any recapitalization effort.
The Teamsters issued an announcement saying the latest restructuring deal with YRC ''paves the way to save the jobs of 25,000 Teamsters and keep the company in business.''
The Teamsters previously agreed to 15 percent pay cuts for its members and that YRC could defer pension contributions to help the company conserve cash. A cost-cutting agreement approved last October between the union and YRC is now subject of a lawsuit from a trucking competitor, saying it undercuts a national trucking agreement with the Teamsters and puts other trucking companies at a competitive disadvantage.
The Teamsters will get stock ''issued for the benefit of those employees,'' YRC said in a filing with the Securities and Exchange Commission. The Teamsters also will get two seats on YRC's board of directors. Pension payments will resume later this year as well.
''The principal objective of the company was to achieve a comprehensive restructuring with a solid foundation for long term success,'' Lamar said in a prepared statement. ''I believe the agreement in principle as represented by the term sheet will do just that. We appreciate both the support and confidence of our lenders and the dedication and sacrifice of our thousands of employees in their efforts to support the future success of [YRC.]''
Lamar on Tuesday said the upcoming dilution of YRC stock should not cause the company to be delisted from trading on the Nasdaq exchange.
YRC lost $322 million on revenue of $4.3 billion in 2010. In 2009, YRC lost $622 million. Executives earlier this year said YRC has positive cash flow. For the fourth quarter of 2010, YRC reported net income of $23 million on revenue of $1.09 billion.
