YRC Worldwide Inc. announced that the company has entered into definitive agreements with key stakeholders providing for their support of a comprehensive restructuring plan. The company reported that more than 95 percent of the senior secured lenders now have approved the restructuring documentation, as have 100 percent of the company’s multiemployer pension funds, along with the International Brotherhood of Teamsters, and 100 percent of the lenders under the company’s asset-backed securitization facility, in each case subject to the terms and conditions contained in the agreements.
“When we announced the nonbinding agreement in principle in February, we noted that our primary objective was to achieve a comprehensive restructuring with a solid foundation for long-term success,” says John Lamar, chief restructuring officer and lead director of YRC Worldwide. “With these agreements, we believe that foundation is now in place, and we remain on target to close the restructuring in July.”
The Overland Park, Kan.-based company says the restructuring plan set out in the definitive agreements anticipates an infusion of $100 million in new capital, as well as increased liquidity from a new asset-based loan facility, replacing the current ABS facility. In addition, the restructuring plan contemplates that a portion of the company’s existing loans and other obligations will be exchanged for new securities, including the exchange of some obligations for equity. This is expected to be accomplished by a series of transactions to be completed in July and would result in the company’s existing shareholders holding about 2.5 percent of the company’s outstanding common stock, subject to further dilution by a management incentive plan and the conversion of certain new securities.
“We sincerely appreciate the support given to YRC Worldwide from our lenders, the pension funds and the Teamsters,” Lamar says. “With our stakeholders having shown their confidence in the company by executing these definitive agreements, we look forward to completing the restructuring.”
