YRC Worldwide Successfully Closes $300 Million Debt Reduction
February 03, 2014
Trucking company parent YRC Worldwide has successfully completed a series of transactions that will cut its debt by approximately $300 million.
The company issued $250 million of common and preferred stock, the proceeds of which will be used to retire the company's convertible notes. Additionally, approximately $50 million in principal amount of the company's other convertible notes were exchanged or converted to common stock.
It announced that it successfully amended and extended its pension fund obligations to December 2019 and has satisfied the final conditions to its modified contract with the Teamsters Union that was approved in late January, retaining a 15% wage cut and added new concessions worth about $70 million in cost savings
"Today is a great day in the history of YRCW,” said Jamie Pierson, chief financial officer of YRC Worldwide. “Beginning in late 2011, this management team set a very deliberate course to stabilize the company and return it to the prominence it once held. While we are not yet done with our operational turnaround at YRC Freight, today's equity investment and subsequent reduction of approximately $300 million in debt is an incredible validation of the hard work and commitment of every single YRCW employee."
YRC Worldwide has racked up more than $1 billion in debt over the past several year with losses of more than $3 billion since 2007, nearly forcing it to declare bankruptcy at least twice.
"This transaction will substantially de-lever the company's balance sheet and improve the company's credit profile allowing us to move forward with the final step in the company's capital structure transformation which is refinancing the senior portion of our debt,” said Pierson. “We anticipate refinancing our senior debt facilities in mid to late February and by doing so believe we will be able to reduce our interest expense and extend the maturities for five years
He said the anticipated capital structure will put the company on solid financial footing and enable it to concentrate on achieving improved operating results for all stakeholders.