YRC Worldwide amendments provide more time to finalize recovery

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YRC Worldwide Inc. on Tuesday, Dec. 21, announced amendments to its credit agreement and asset-backed securitization facility. Both amendments are intended to provide additional time for the company and its key stakeholders to finalize plans to recapitalize the company’s balance sheet, including working with its lenders and the Teamster negotiating committee for the International Brotherhood of Teamsters.

“We appreciate the continued support of all our stakeholders as we work to finalize our comprehensive recovery plan,” says Sheila Taylor, executive vice president and chief financial officer of YRC Worldwide. “These amendments are another indication of the positive dialogue with our lenders and their further interest in a long-term solution for the company.”

YRC Worldwide says the amended credit facilities extend the deferral of credit agreement interest and fees through mid-May 2011 and interest and fees under the ABS facility through May 31, 2011. The amendment requires the company to reach an agreement in principal to recapitalize its balance sheet by Feb. 28, 2011, complete final documentation by March 15, 2011, and close by May 13, 2011.

YRC Worldwide says the effectiveness of the credit agreement and ABS facility amendments is subject to the consent of TNFINC and agreement by a supermajority of the multiemployer pension funds who are party to the company’s contribution deferral agreement to an extension of the deferral of interest and principal payments under that agreement through May 31, 2011.

In addition, YRC Worldwide says the amendments establish its 2011 financial covenants in conjunction with the company’s finalization of its 2011 financial forecast. The company says that for the four quarters ending March 31, 2011, its adjusted earnings before interest, taxes, depreciation and amortization covenant is $140 million, and its minimum available cash covenant will remain at $25 million. The company says it expects fourth quarter 2010 adjusted EBITDA in excess of the amount required to meet its rolling-three-quarter covenant level of $100 million.

A U.S. District Court judge on Friday, Dec. 17, ruled that ABF Freight System did not have standing to sue YRC Worldwide and the Teamsters in court. Judge Susan Webber Wright dismissed the case brought by Fort Smith, Ark.-based ABF, which argued that concession agreements between the Teamsters union and three YRC Worldwide entities violate the National Master Freight Agreement.