(Reuters) - Shares of YRC Worldwide Inc (YRCW.O) rebounded as much as 24 percent after the struggling trucker said it was in talks with union leaders to revise a vital labor contract.
YRC shares had lost nearly a third of their value since January 9 when workers represented by the International Brotherhood of Teamsters voted down YRC’s offer to extend their contract.
An extension would have kept in place pay cuts and overtime rates agreed to six years ago.
“We understand that simply re-voting the same proposal is not an option,” YRC Chief Executive James Welch said in a statement on Thursday.
An agreement with the union, which represents 26,000 of YRC’s about 31,000 workers, is key to the restructuring of more than $1 billion in debt. The first payment of $69.4 million is due on February 15.
"We have told the company that we are willing to consider a modified proposal," the union said in a letter posted on its website. (r.reuters.com/web26v)
Analysts have said YRC has a few more options if it fails to reach a quick agreement with the workers, including working out deferred payments with bankers.
“A favorable resolution (with Teamsters) prior to February 15 remains within the realms of possibility,” Moody’s Investor Service said on Tuesday.
YRC, with a market capitalization of about $139 million, called off a meeting with bankers on January 10 after 61 percent of its Teamster union workers rejected the contract proposal.
The company, which has posted losses in nine of the past 10 quarters, is expected to report a loss of nearly $30 million for the fourth quarter, according to Thomson Reuters I/B/E/S.
The Overland Park, Kansas-based company’s shares were up 19 percent at $15.27 on the Nasdaq on Thursday afternoon.
Reporting by Sagarika Jaisinghani, Sweta Singh and Mridhula Raghavan in Bangalore