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YRC Completes Restructuring

Shareholders of YRC Wordwide Friday voted overwhelmingly in favor of its restructuring

by Staff
September 18, 2011
YRC Completes Restructuring

 

2 min to read


Shareholders of YRC Wordwide Friday voted overwhelmingly in favor of its restructuring.



An internal merger agreement combined YRC Worldwide and its recently created YRC Merger Sub subsidiary, with YRC Worldwide as the surviving company. The merger was the final stage in the $500 million restructuring, which was approved by YRC, the Teamsters and its lending group in July.

The deal resulted in the release of hundreds of millions of shares of common stock. YRC Worldwide's banking group will own about 72.5 percent of the company's stock, and its Teamsters employees 25 percent.

Existing shareholder equity was practically wiped out, with those shareholders now holding only about 2.5 percent of YRC Worldwide's stock. YRC stock prices dropped more than 65% on Friday. Shares fell as low as 7 cents on Friday, down from a Thursday close at 30.7 cents, reported Reuters.

Interim Chief Financial Officer Jamie Pierson told The Wall Street Journal in an interview that YRC likely will enact a reverse stock split in late November or early December to reduce the share count. However, that won't affect the dilution to existing shareholders that resulted from Friday's action.

YRC received a new notice last week from the Nasdaq Stock Market that it faces delisting because its shares have traded below $1 for more than 30 consecutive days.

The Kansas City Star reports that YRC CEO James Welch, who's been on the job for eight weeks, told reporters that on-time delivery rates, which had suffered during the company's struggle to survive the recession loaded down with debt from major acquisitions, have improved "faster than he had thought possible."

Welch, the paper reports, said part of the recovery plan involves restoring the employee culture that Roadway and Yellow each had but had not maintained as a combined YRC Worldwide.


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