YRCW extends credit amendment again

Less-than-truckload (LTL) transportation services provider YRC Worldwide (YRCW) said that it has made amendments to its credit agreement and asset-backed securitization facility (ABS) in order to provide additional time to finalize plans to recapitalize its balance sheet.

By ·

Less-than-truckload (LTL) transportation services provider YRC Worldwide (YRCW) said that it has made amendments to its credit agreement and asset-backed securitization facility (ABS) in order to provide additional time to finalize plans to recapitalize its balance sheet.

This marks the 19th amendment to the company’s credit agreement. Company officials said that YRCW is also working with its lenders and the Teamster negotiating committee for the International Brotherhood of Teamsters (TNFINC) in order to get back on solid financial footing.

In November, YRCW ratified its labor agreement with the Teamsters for the third time, which is expected to result in an annual savings of $350 million through 2015. A key provision of that agreement is for the company to raise $300 million in new equity by December 31, 2010 and close the deal by March 31, 2011 (under these terms, YRCW is required to obtain a definitive agreement with an equity player, and failing that agreement require that lenders convert a portion of their debt to equity in order to keep their concessions in place).

YRCW said that the amended credit facilities extend the deferral of credit agreement interest and fees through mid-May 2011 and interest fees under the ABS facility through May 31. And the amendment requires the company to reach an agreement in principal to recapitalize its balance sheet by February 28, complete final documentation by March 15 and close by May 13, with the effectiveness of the credit agreement and ABS facility amendments subject to the consent of TNFINC and a supermajority agreement of the multi-employer pension funds party to the company’s contribution deferral agreement to an extension of the deferral of interest and principal payments under that agreement through May 31, 2011.

A Wall Street analyst said that this news does not significantly change anything regarding YRCW’s financial condition.

“Nothing about the company has significantly changed from this release, in our view, and no new CEO or equity investor ($300mm of new money required in the current restructuring plan) has been identified, leaving us still skeptical of this plan’s probability of success,” wrote Stifel Nicolaus analyst David Ross ina research note.

YRCW had a net loss of $62 million and $1.33 per share in the third quarter and has recorded losses in excess of $2 billion over the last 11 quarters, But the company has had four consecutive quarters of year-over-year improvement and six straight quarters of sequential improvement, following the integration of its Yellow and Roadway units in March 2009.


Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

LTL · YRC Worldwide · All Topics
Latest Whitepaper
Revisiting Supplier Relationship Management to Boost Real Value in the Supply Chain
Supplier relationship management (SRM) initiatives are on the rise, and companies who successfully implement these programs can realize a significant return on their technology investments.
Download Today!
From the May 2017 Issue
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management, but what sort of technologies fall under these broad terms, and how will they change the management capabilities at our disposal? To find out, we talked to some noted supply chain analysts, consultants and technology executives and gathered six digital trends to watch.
Transportation Trends and Best Practices: The Battle for the Last Mile
2017 Technology Roundtable: Are we closer to “Intelligent” Logistics?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Cross Border 2017: Managing Your Supply Chain for Efficient and Secure Crossings
In this webinar, we'll unveil best practices to establish a world class logistics operation that improves safety, security, efficiency, and customer service levels at a lower cost.
Register Today!
EDITORS' PICKS
The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...

LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...