(Adds details and updates share movement)
Jan 27 (Reuters) - Teamsters union members have approved YRC Worldwide Inc’s revised contract, clearing the way for the struggling trucking company to proceed with refinancing its more than $1 billion debt, sending its shares up as much as 11 percent.
The company will meet lenders on Tuesday, sources told Thomson Reuters LPC. An earlier meeting was called off on Jan. 10 after an overwhelming majority of workers rejected extending cuts in pay and overtime agreed six years ago.
The contract extension, which won the support of 66 percent of the union members who voted over the weekend, adds bonus payments for employees on seasonal layoffs and keeps the three-week vacation. (r.reuters.com/jaf46v)
YRC, which was on the verge of bankruptcy about two years ago, has been struggling with its huge debt and the approval gives the Overland Park, Kansas-based company much-needed labor stability to focus on restructuring.
The first payment of $69.4 million is due on Feb. 15. YRC Worldwide has a market capitalization of about $200 million.
“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 the company’s proposal to extend the labor agreement was voted down.
The company had then said a contract extension through 2019 was “the best - and only remaining - path forward.”
YRC shares rose about 47 percent since Jan. 16 to their Friday close. The stock lost about 31 percent of its value from Jan. 9, when the workers rejected the contract, through Jan. 15.
The stock was up 4 percent at $19.60 at midday on the Nasdaq on Monday. (Reporting by Mridhula Raghavan in Bangalore; Editing by Kirti Pandey)