(Adds details, CEO comment, background)
Dec 23 Trucking company YRC Worldwide Inc
said it reached an agreement with some shareholders and
institutional investors to reduce its debt by about $300
Shares of YRC Worldwide jumped as high as 30 percent as the
deal means it is much more likely that the company, on the verge
of bankruptcy two years ago, can extend its restructuring
program by four years until 2019.
YRC began restructuring in 2011, setting out to save $25
million-$30 million annually as it faces repayment of $1.36
billion of debt starting next year.
Under the agreement, investors will invest $250 million in
cash at $15 per share for newly issued shares of the company
that will be used to pay down debt due in 2014 and
Also, holders of around $50 million in convertible notes due
March 2015 will convert the notes to stock at $15 to $16.01 per
share, further bringing down debt, the company said.
"After shedding a significant portion of our non-core assets
and operations and with the help of our unionized and
non-unionized employees, we have focused our attention back to
what we do best - North American LTL trucking," Chief Executive
James Welch said in a statement.
The company expects annual savings of $100 million under a
refinancing plan, that will see no cuts in existing employees'
wages or pension and health benefits of about 26,000 workers.
YRC Worldwide proposed last month to extend its
restructuring program to March 31, 2019 but needs the agreement
of the Teamsters union by early January next year.
The proposal will be voted on by unionized staff by Jan. 8,
said the Overland Park, Kansas-based company.
YRC shares hit a high of $20.58 before easing back to $18.31
in morning trading on the Nasdaq.
(Reporting by Rohit T. K. in Bangalore; Editing by Joyjeet Das)