YRC Worldwide Inc. said today its shareholders approved the issuance of about 900 million new shares of stock as a condition of a late 2009 debt-for-equity exchange that gave YRC's bondholders effective control of the trucking company.
The agreement increases the number of YRC shares from about 100 million to 1 billion, according to YRC. Although the increase in the number of shares was expected, fears of a value dilution sent YRC stock plunging on Feb. 17. YRC's shares fell to 39 cents a share, a nearly 29-percent decline from prior-day levels.
In addition, YRC's shareholders authorized the company's board to reduce the number of common shares at a future date. The date has yet to be determined, but it is expected to be during the first half of 2010, the company said.
The approvals were required for the company to proceed with the sale of $70 million in bonds, with most of the proceeds to be used to meet $45 million in debt obligations coming due in April.
Separately, YRC employees at one of two Chicago-area locals represented by the Teamsters Union have agreed to forgo pension contributions for the rest of the year in return for YRC's withdrawing a demand for a 5-percent wage cut. By a 178-142 margin, members of Teamster Local 705 reversed two earlier votes opposing the temporary termination of pension payments by YRC. YRC is expected to resume contributions at the beginning of 2011.
Another Chicago local, 710, which has also balked at concessions, has not changed its position. Both locals negotiate their contracts with YRC outside of the National Master Freight Agreement, which governs the activities of virtually all YRC unionized employees.