By Tom Hals
WILMINGTON, Del., March 16 (Reuters) - Shares of YRC Worldwide Inc fell 28 percent on Wednesday after the top U.S. trucking company said its lenders could declare the company in default and push it into bankruptcy.
The Overland Park, Kansas-based company said in its annual report filed on Monday that it failed to get the necessary approvals for its proposed financial restructuring, which would have swapped some of the company's debt into stock.
The company's stock closed 28.3 percent lower at $1.47 on Nasdaq and had hit its lowest in at least 10 years, according to information on the company's website.
The company has been struggling for more than a year with debts of more than $1 billion, high labor costs and a sluggish economic recovery.
John Lamar, the company's chief restructuring officer, said in a letter to employees that pension plans had agreed to the proposed restructuring but indicated they wanted higher interest payments on deferred obligations.
'The interest rate for the deferred pension note is just one specific term of the overall restructuring that will have to be addressed,' said Lamar's letter, which was sent to Reuters in response to a request for comment. 'This is all part of the negotiating process.'
The failure to reach agreement meant the company failed to meet milestones in its credit agreement.
'As a result, the required lenders have the right, but not the obligation, to declare an event of default,' the company said in its annual report. The company said it would anticipate filing for bankruptcy should a default be declared.
Standard & Poor's cut the company's credit rating deeper into junk, to CC from CCC- due to 'increasing bankruptcy concerns.'
The failure to get support for the restructuring proposal comes less than two weeks after the company's chief financial officer resigned less than 18 months into the job.
(Reporting by Tom Hals; Editing by Gary Hill) Keywords: YRCWORLDWIDE/ (thomas.hals@thomsonreuters.com; 1-646-223-6356; Reuters Messaging thomas.hals.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WILMINGTON, Del., March 16 (Reuters) - Shares of YRC Worldwide Inc fell 28 percent on Wednesday after the top U.S. trucking company said its lenders could declare the company in default and push it into bankruptcy.
The Overland Park, Kansas-based company said in its annual report filed on Monday that it failed to get the necessary approvals for its proposed financial restructuring, which would have swapped some of the company's debt into stock.
The company's stock closed 28.3 percent lower at $1.47 on Nasdaq and had hit its lowest in at least 10 years, according to information on the company's website.
The company has been struggling for more than a year with debts of more than $1 billion, high labor costs and a sluggish economic recovery.
John Lamar, the company's chief restructuring officer, said in a letter to employees that pension plans had agreed to the proposed restructuring but indicated they wanted higher interest payments on deferred obligations.
'The interest rate for the deferred pension note is just one specific term of the overall restructuring that will have to be addressed,' said Lamar's letter, which was sent to Reuters in response to a request for comment. 'This is all part of the negotiating process.'
The failure to reach agreement meant the company failed to meet milestones in its credit agreement.
'As a result, the required lenders have the right, but not the obligation, to declare an event of default,' the company said in its annual report. The company said it would anticipate filing for bankruptcy should a default be declared.
Standard & Poor's cut the company's credit rating deeper into junk, to CC from CCC- due to 'increasing bankruptcy concerns.'
The failure to get support for the restructuring proposal comes less than two weeks after the company's chief financial officer resigned less than 18 months into the job.
(Reporting by Tom Hals; Editing by Gary Hill) Keywords: YRCWORLDWIDE/ (thomas.hals@thomsonreuters.com; 1-646-223-6356; Reuters Messaging thomas.hals.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2011 AFX News
