YRC Worldwide lenders extend deadline ahead of union vote result
Kansas City Business Journal - by David Twiddy Date: Tuesday, October 26, 2010, 7:06pm CDT
* YRC Worldwide renews key piece of financing * YRC Worldwide concessions deal would extend cuts, require restructuring
YRC Worldwide Inc. will have some breathing room with its lenders, even if the tentative concessions agreement with its union fails to pass later this week.
In a securities filing Tuesday, the Overland Park-based trucking company (Nasdaq: YRCWD) said the recent renewal of a key piece of financing won’t expire immediately if the International Brotherhood of Teamsters votes down a third round of wage and benefit concessions.
Instead, the company would have until Jan. 10 to have the agreement in force, providing time for a possible revote if necessary.
YRC sought a renewal of the asset-backed securitization facility, a key source of operational cash that was scheduled to expire at the end of the month, which would have forced YRC to pay back $147 million in borrowed money and $72 million that is tied up in a letter of credit.
In discussions with members, Teamster leaders had warned that voting against the concessions would cause the ABS to expire.
The filing said the lenders still could determine YRC in default if the concession vote failed and the Teamsters determined not to bring the issue up for a revote.
The tentative agreement between YRC and the Teamsters includes steps designed to save the company $350 million a year and a wide-ranging plan to restructure the company’s finances. Both steps are considered necessary to keep the company competitive and avoid a bankruptcy filing.
YRC also said it received a letter from Nasdaq on Oct. 18 saying that the company had regained compliance with the exchange’s listing rules. Nasdaq officials had threatened to delist the company’s shares for consistently trading for less than a dollar. But on Oct. 1, YRC implemented a 1-for-25 reverse-stock split that initially boosted share prices to $6.25.
Shares gained 22 cents to $4.52 in Tuesday trading, which ended before YRC’s securities filing.
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