Struggling Truck Giant Seeks $1.15-Billion Loan
OVERLAND PARKS, KS — One of the world's largest LTL carriers, the financially-troubled YRC Worldwide, hopes to borrow $1.15 billion to refinance its debt, according to Bloomberg News.
Bloomberg News reports the deal, led by Credit Suisse Group AG, includes a $700-million term loan and a $450-million asset-backed portion, both due in five years.
YRC, which is the parent of several trucking companies, including YRC Freight and Winnipeg-based YRC Reimer (formerly named Reimer Express), has reported annual losses since 2007. Just before the end of last year it reduced debt by $300 million, but still owes $1.4 billion, which many blame on “numerous missteps” by prior company management. One such misstep is underestimating the costs of integrating YCR Worldwide’s Yellow and Roadway businesses into one, now known as YRC Freight.
The company currently pays an annual interest of $150 million, but the debt reduction and refinancing will cut that number by as much as a third, YRC’s CFO Jamie Pierson told Bloomberg News.
More details will be announced Thursday, the same day that results are expected to be released from a vote by 26,000 YRC Teamster Union employees on extending their current labor contract into 2019.
The Kansas City Star reports it’s the fourth time in five years the unionized drivers, dock workers, mechanics, clerks, porters, janitors and maintenance workers have voted on reduced pay and benefits.
If approved, the contract will cut pay by 15 percent and reduce pension and other concessions for workers. Truck drivers will keep the currently set pay raises beyond 2015, but the proposal freezes pay for other employees.