YRC starts debt buyback dependent on union wage reduction
Kansas City Business Journal
YRC Worldwide Inc. has started offering as much as $100 million in cash to buy back senior debt and plans to end the offering at midnight Dec. 23.
Overland Park-based YRC (Nasdaq: YRCW) said in a release Tuesday that consummation of the offer is contingent on employees of its subsidiaries who are members of the International Brotherhood of Teamsters ratifying an amendment to a national master freight agreement that includes a wage reduction. YRC said it is in talks with the union about a proposal to enter into such an amendment.
“We approached the Teamsters in an effort to explore all available options under the National Master Freight Agreement to ensure our competitiveness and preserve the benefits and jobs of our union employees,” YRC Chairman and CEO Bill Zollars said in an e-mail. “We hope to discuss modifications to the current contract with the Teamsters leadership on both a national and a local level.”
YRC’s stock closed on Tuesday at $3.15, up 72 cents, or 29.6 percent, on volume of 3.4 million shares, according to Yahoo Finance. The stock’s average daily volume the past three months is 2.6 million shares.
The company said Monday that it would offer to buy back its 5 percent and 3.375 percent contingent convertible senior notes due in 2023 and its 8.5 percent senior notes due in 2010. The company said that it had drawn on its senior credit facility to finance the purchases and that it expected to buy at least $230 million of the notes, which would reduce its debt by at least $130 million.
YRC said Thursday that it would take a $7 million to $10 million charge in the fourth quarter and first quarter for fees to collateralize its remaining unencumbered assets after Standard & Poor’s Ratings Services downgraded its credit rating.
YRC ranks No. 2 on the Kansas City Business Journal’s list of area public companies.
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