Trucker YRC shares plummet as company restructures
OVERLAND PARK, Kansas
OVERLAND PARK, Kansas (Reuters) - Shares of long-troubled U.S. trucker YRC Worldwide (YRCW.O) plunged more than 65 percent on Friday as the company completed a financial restructuring that essentially wiped out shareholder equity.
At a meeting Friday morning, a group of lenders, bondholders and labor union members took control of Overland Park, Kansas-based YRC, merging it into a new formed subsidiary as part of a sweeping financial restructuring that gives YRC about $100 million in new capital.
"When you consider that as part of the merger they are issuing ... about 4 billion in incremental shares... there really is no equity value in the company," said Morgan Keegan & Co analyst Arthur Hatfield.
"We were unsure of the timing of when the market would recognize this. But this is the final stages of the restructuring," Hatfield said.
YRC has been struggling to stay afloat for the last few years after acquisitions loaded the company down with debt, and the recession ate into revenues.
As part of its restructuring, YRC has appointed new management and is working to reclaim market share lost to rivals.
YRC shares fell as low as 7 cents on Friday, down from a Thursday close at 30.7 cents. Trading volume exceeded 100 million shares at midday.
(Reporting by Carey Gillam; editing by John Wallace)