Truck Giant YRC Worldwide To Reduce Debt by $300 Mil
OVERLAND PARK, KS — YRC Worldwide announced that it is cutting its debt by about $300 million.
"Today is a great day in the history of YRCW. Beginning in late 2011, this management team set a very deliberate course to stabilize the company and return it to the prominence it once held,” said Jamie Pierson, chief financial officer of YRC Worldwide. “While we are not yet done with our operational turnaround at YRC Freight, today's equity investment and subsequent reduction of approximately$300 million in debt is an incredible validation of the hard work and commitment of every single YRCW employee.”
The financially troubled trucking company issued $250 million of common and preferred stock, which will be used to retire the company's convertible notes, and around $50 million in principal amount of the company's other convertible notes were exchanged or converted to common stock.
What’s more, the company also announced that it successfully tweaked and extended its pension fund obligations to December 2019 and has satisfied the final conditions to its modified contract with the International Brotherhood of Teamsters.
In late January, about 20,000 Teamster members voted to approve a labor extension with the carrier to 2019, which allowed YRC to move forward with the debt reduction program.
Now, YRC will be able to cut interest expenses and to extend the maturities for five years, Pierson said.
“Most importantly, we can now fully focus on investing in our employees, equipment and technology and improving our total customer experience. The anticipated capital structure will put the company on solid financial footing and enable us to concentrate on achieving best-in-class performance leading to improved operating results for all of our stakeholders," Pierson said.