YRC Reaches Agreement to Reduce Debt by $300 Mln.
YRC Worldwide Inc. has reached an agreement with some of its creditors to reduce its debt by about $300 million, a move the carrier said is a key to obtaining new concessions from the Teamsters union.
As a result of the agreement, YRC’s interest payments might be cut by $30 million to $50 million annually from the $150 million it currently pays, Chief Financial Officer Jamie Pierson told Bloomberg News Dec. 23. The deal is contingent on getting agreements from 90% of its pension fund debt holders.
“The agreement is a momentous step toward delevering the company’s balance sheet, significantly improving the company’s credit profile, and is expected to secure some of the best paying jobs in the [less-than-truckload] industry,” CEO James Welch said in a statement.
The debt-reduction deal is a key requirement the Teamsters union has placed on YRC in order to agree to a new memorandum of understanding with various labor concessions, YRC said. But the MOU still must be approved by Teamsters membership in a vote scheduled to conclude Jan. 8.
YRC racked up $1.4 billion in debt from acquisitions and what Welch called “missteps” before he became CEO in 2011, Bloomberg said.
YRC ranks No. 5 on the Transport Topics Top 100 list of U.S. and Canadian for-hire carriers.
