Jan 27 Teamsters union members have approved YRC Worldwide Inc's revised labor contract, clearing the way for the struggling trucking company to proceed with its refinancing plans, sending its shares up 13 percent before the bell.
The contract extension, which won the support of 66 percent of the union members who voted, adds bonus payments for employees on seasonal layoffs and keeps the three-week vacation. (r.reuters.com/jaf46v)
The much-needed approval will now allow the Overland Park, Kansas-based company to restructure its debt of more than $1 billion. The first payment of $69.4 million is due on Feb. 15.
"This was a very difficult vote for our members, but in the end they did what they believe will give this company the best chance to stay in business and protect their jobs," Jim Hoffa, Teamsters general president, said in a statement late on Sunday.
"Now we will hold management's feet to the fire to make sure our members' jobs are protected," he said.
YRC restarted talks with the Teamsters on Jan. 16, a week after an overwhelming majority of workers voted down the company's proposal to extend its labor agreement.
The company had then said a contract extension through 2019 was "the best - and only remaining - path forward."
YRC shares have risen about 47 percent since Jan. 16 to Friday's close. The stock was trading at $21.25 before the bell. (Reporting by Mridhula Raghavan in Bangalore; Editing by Kirti Pandey)