December 16, 2009

YRC again pushes back deadline for equity deal

YRC Worldwide extends deadline for debt-for-equity swap for second time, amid hope deal could be struck soon.

By Mark B. Solomon

YRC Worldwide Inc. today extended until Dec. 17 the deadline for more bondholders to accept a proposal to exchange approximately $530 billion in debt in return for 1 billion new equity shares and effective control of the troubled less-than-truckload carrier.

At the same time, the short-range extension has given rise to hope that a deal will soon be struck with YRC's key stakeholders—notably its lenders and organized labor—to successfully complete the exchange.

YRC's lenders have stipulated that at least 95 percent of its bondholders must agree to the swap before they will release $106 million of a revolving credit line to YRC and allow the carrier to defer interest payments and other expenses in 2010. Through the most recent deadline of Dec. 15, 75 percent of the bondholders had agreed to the exchange. Should the swap fail, it is expected YRC will have no choice but to file for bankruptcy protection.

Analysts at JPMorgan Chase said they expect an announcement as early as Friday that the banks will accept less than 95-percent approval for the deal to go through. "A threshold in the 80- to 85-percent range would appear to allow a realistic potential" for a successful completion, Morgan analysts said in a research note distributed Dec. 15.

About the Author

Mark B. Solomon
Executive Editor - News
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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