YRC Worldwide Inc. announced Friday, Jan. 30, that it has closed the first part of the sale and financing leaseback transaction from a contract with NATMI Truck Terminals entered on Dec. 19. The company says it received about $101 million of proceeds Friday and expects to receive about $50 million more in the second closing.
“This is one of many significant steps in the initiatives to improve our liquidity,” says Tim Wicks, executive vice president and chief financial officer of Overland Park, Kan.-based YRC Worldwide. “We are pleased with our strong working relationship with NATMI and how quickly we have been able to complete this first step. We remain encouraged by our progress on the next phases. These transactions are a key component of the discussions with our banks, which remain very productive.”
According to YRC Worldwide, in its waivers filed with the SEC on Jan. 22, it stated that it now has the ability to use the proceeds from this transaction for operating purposes, which is the company’s current intention. The company says it will account for the proceeds as a financing transaction; therefore, the assets remain on the books, and a lease obligation will be recorded as long-term debt. The company says it will recognize the lease payments through interest expense with no impact to depreciation expense.