... gute Nacht YRCW YRC Worldwide restructuring plan meets with skepticismKansas City Business Journal - by David Twiddy, Staff Writer Date: Tuesday, May 3, 2011, 2:55pm CDTYRC Worldwide Inc.’s latest restructuring effort has gotten a cool reception from investors and Wall Street analysts. The Overland Park-based trucking company (Nasdaq: YRCW) announced late Friday that it had signed definitive agreements to pump $100 million in new capital into its beleaguered balance sheet and eliminate $140 million or more in debt, as well as replace an expiring asset-backed securitization facility. But current shareholders will watch their ownership of the company slide to 2.5 percent or less as YRC issues millions of new shares to pay the new equity investors and debt holders. The value of YRC’s shares has declined as much as 37 percent since the announcement, reaching $1.25 in Tuesday afternoon trading. Analysts have had few nice things to say about the deal, which must close by July 22, other than that it will keep YRC out of bankruptcy through the end of the year. Analyst Ed Wolfe of Wolfe Trahan said in a note that the deal was less than expected, given that the International Brotherhood of Teamsters union had demanded at least $300 million in new equity when its members agreed to extending current pay and benefits concessions in October. “Based on YRCW’s cash burn rate and increasing cash needs, we don’t believe it likely raised enough new capital and/or reduced its cash obligations enough to survive more than the next 12 to 18 months without raising significant additional capital,” Wolfe wrote. In an earlier report, RW Baird analyst Jon Langenfeld — who rates the company’s stock as “underperform” with a target share price of $0 — openly asked why lenders would continue granting concessions, noting that although YRC’s operating performance has improved, it still faces high costs and declining market share. “Our belief is that lenders have reacted to political and social pressure to keep in business an employer of 32,000 unionized employees,” Langenfeld wrote. Meanwhile, Fitch Ratings decided to downgrade YRC’s default rating from “CC” to “C,” which is defined as “default is imminent or inevitable,” and downgrade YRC’s secured bank credit facility from “B-” to “CCC,” indicating that default is a real possibility. “Ultimately, the company will need to strengthen its operational profile such that it can generate positive free cash flow on a sustainable basis,” Fitch said. “Until that time, the company will continue to run the risk of another liquidity crisis, and given that it has already undertaken essentially two out-of-court restructurings, it is likely that another liquidity squeeze would result in a bankruptcy.” The ratings agency warned that an adverse verdict in the summer about competitor ABF Freight System Inc.’s challenge of the Teamster concessions also could force YRC into bankruptcy. Related News LG Nico -----------
Que sera, sera. |
Thread abonnieren
