Thursday, December 31, 2009

YRC Trucking Saga Continues With Yet Another New Deadline For LTL Outfit

Carrier’s Struggle to Avoid Bankruptcy Continues
Shipping News Feature

US – Having extended the deadline for bond holders to sign up to their debt for equity swap on numerous occasions the company again moved the date for acceptance of the terms back another 24 hours to 23.59 hours last night, 30th December. The less than truck load (LTL) haulier was close to avoiding the inevitable bankruptcy proceedings it has been struggling against as several more investors apparently signed up to the deal.

On the 9th November YRC Worldwide laid out its plans to exchange $536.8 million (plus accrued and unpaid interest) of convertible notes ranging between 3.375% and 5% maturing in 2023 and 8.5% guaranteed notes due in April 2010 by 7th December. The offer was to swap the notes for equity shares in the group as detailed to the Securities Exchange Commission (SEC) and the minimum uptake represented 95% of the company’s issued and outstanding common stock.

Since the original proposal YRC have changed the deadline for acceptance five times and reduced the required uptake of the offer to 70% of the 2023 issue and 85% of the 2010 notes. The Teamsters Union have fully supported the haulier as attempts have been made to streamline procedures and improve the viability of the company including the sale of its contract carriage business to Greatwide Logistics for $34 million. A planned protest by workers this week against investment groups who had thus far refused to accept the offer was called off after the latest round of sign ups.

The latest extension would seem to indicate that, despite an inordinate amount of prevarication, a settlement which will enable YRC to cover the near $20 million tranche of interest due to lenders by tomorrow, is tantalisingly close. Many other competitors are studying the situation closely as it is felt throughout the industry that the amount of oversupply throughout the trucking and drayage sectors must result in some players falling by the wayside, as we have seen with Arrow Trucking and Carlen Transport in the past week alone.

As soon as confirmation of the latest situation is received we shall publish it here.