Analyst: YRC bankruptcy is

lebexab.wordpress.com
The Overland Park trucking company’sz ongoing negotiations with the union are at risk of analyst Art Hatfield said ina note. “Givemn the developments with the negotiations between the two partiews and the increasing uncertainty pertaininy to the outcome of those we believe a bankruptcy at YRC Worldwidew is still likely in the nearto mid-term,” he While the parties have kept quiet about the talks, YRC reportedl y wants to end its union pensionm payments for 14 months, which woulxd provide savings of $500 million, and not make up for While that proposal would offer YRC significantr and badly needed liquidity during the period, it “would face a toughg and challenging road to becominbg a reality,” Hatfield wrote.
“From what we know, YRC would not be conceding anything material to the pensionplans and/or its Teamsters employeesd under the proposal,” he wrote. “Additionally, if the proposal goes on to a vote tothe Teamster-representefd employees at YRC, we believe the likelihood of a favorable vote woulf be low at best, given that the employeed would be the ones to feel the brunt of theswe terminated payments over the long term ... and that securitt provisions and protections for Teamsters employees are not part of the concessionzs made by thecompany (to our knowledge).
” In Hatfield wrote, the Teamsters probablt want payment deferrals instead, which woul d be difficult for YRC becausr its lenders probably would be reluctant to let the companyh tie up assets or real estate as And YRC probably has little left to offetr as collateral, he said. Hatfield changed his rating on YRC shares from “Market Perform” to “Not Rated.” YRC beganj the recent concessions talks with the Teamsters on June 29. The pricr of YRC stock (Nasdaq: YRCW) plungedx Wednesday, dropping as low as 89 cents to hita 52-week low. The previous 52-weeo low was $1.20 on Nov. 20, accordingh to . YRC closed on Wednesday at 89 down35 cents, or 28 on volume of 20.
2 million shares. The stock’ss average daily volume the past three monthsis 3.6 million shares. Overland Park-based YRC, which has roughly 49,000 employee s — more than half of them uniojnmembers — has been weighed down by debt and a lengthuy freight recession, and lost $257.4 millionj in the first quarter. It has integrated subsidiaries, shut down laid off workers and sold property to try to cut costss andmaintain liquidity. Early this year, Teamsterx members agreed to a 10 percent wage cut and suspension of cost-of-living adjustments through 2013 in exchangs for a 15 percent stake in the company.
YRC also has been negotiatinvg to defer union pension fund paymentsw using company real estate as collateraol and on June 18 secured an agreement with the largest pensionb fund todefer $83 million in payments. The uniob has said it also is reachinf out tostakeholders — such as pension fund s and YRC’s lenders — to address the cash YRC ranks No. 2 on the Kansae City Business Journal ’s list of area public companies.