A recent flurry of moves by YRC Worldwide Inc. — including a five-year contract extension with its 30,000 Teamsters — has reduced the company's debt by $300 million.
YRC Chief Financial Officer Jamie Pierson said in a news release that the moves were part of a long-range strategy by the management team.
“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,” he said.
In its final moves completed late last week, the company issued $250 million of common and preferred stock, the proceeds of which will be used to retire the company’s convertible notes. Additionally, approximately $50 million in principal amount of the company’s other convertible notes were exchanged or converted to common stock.
The company also announced that it successfully amended and extended its pension fund obligations to December 2019 and satisfied the final conditions to its modified contract with the International Brotherhood of Teamsters.
The union rejected a previous proposal, but it approved the latest contract offer Jan. 27 by a vote of 12,267 to 6,314.
Locally, YRC employs a group of Cumberland County warehouse workers, a small contingent of Lancaster workers and those who work at its regional trucking firm, New Penn Motor Express Inc. in Lebanon.
“While we are not yet done with our operational turnaround at YRC Freight, (the) 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,” Pierson said in a statement.
The moves improve YRC’s credit profile and balance sheet so it can “move forward with the final step in the company’s capital structure transformation, which is refinancing the senior portion of our debt,” Pierson said.
The company anticipates refinancing senior debt facilities later this month, he added, which will further improve its financial picture. Pierson said that will allow YRC to invest in employees, equipment and technology.
The markets responded favorably to the reorganization, with YRCW stock climbing from about $18 a share Jan. 17, to nearly $22 a share today. The company trades on the New York Stock Exchange under the YRCW symbol.