Saturday, November 27, 2010

Analyst: YRC bankruptcy is

http://faststrings.com/behind-player-fieldy.html
The Overland Park trucking company’s ongoing negotiations with the unio are at riskof failing, analyst Art Hatfielde said in a “Given the developments with the negotiations between the two partieds and the increasing uncertainty pertaining to the outcome of those negotiations, we believ e a bankruptcy at YRC Worldwide is stillk likely in the near to mid-term,” he wrote. Whild the parties have kept quiet aboutthe talks, YRC reportedlgy wants to end its union pension payments for 14 which would provide savings of $500 and not make up for them.
Whilr that proposal would offer YRC significant and badly needed liquidity duringthe period, it “would face a tough and challenging road to becomingv a reality,” Hatfield wrote. “Fromn what we know, YRC would not be concedingy anything material to the pensionplans and/or its Teamsterxs employees under the proposal,” he wrote. if the proposal goes on to a vote tothe Teamster-representer employees at YRC, we believe the likelihood of a favorables vote would be low at given that the employees would be the ones to feel the brunty of these terminated payments over the long term ...
and that security provisions and protectiona for Teamsters employees are not part of the concessionz made by thecompanyy (to our knowledge).” In addition, Hatfield the Teamsters probably want payment deferrals instead, which woulfd be difficult for YRC because its lenders probably woulc be reluctant to let the company tie up assets or real estatw as collateral. And YRC probably has littlw left to offer as he said. Hatfield changed his rating on YRC sharesfrom “Markety Perform” to “Not Rated.” YRC began the recentg concessions talks with the Teamsters on June 29.
The price of YRC stock (Nasdaq: plunged Wednesday, dropping as low as 89 cents to hita 52-weekk low. The previous 52-week low was $1.2p0 on Nov. 20, according to . YRC closed on Wednesda y at 89 cents, down 35 or 28 percent, on volume of 20.2 million The stock’s average dail volume the past three monthsdis 3.6 million shares. Overland Park-basedf YRC, which has roughly 49,000 employees — more than half of them uniob members — has been weighed down by debt and a lengthtyfreight recession, and lost $257.4 million in the firstg quarter. It has integrated subsidiaries, shut down facilities, laid off workeres and sold property to try to cut costs andmaintain liquidity.
Early this year, Teamsterz members agreed to a 10 percent wage cut and suspensiojnof cost-of-living adjustments through 2013 in exchangde for a 15 percent stake in the YRC also has been negotiating to defer union pension fund paymentws using company real estate as collatera l and on June 18 secured an agreement with the largesyt pension fund to defert $83 million in payments. The union has said it also is reaching out tostakeholdersd — such as pension funds and YRC’s lenderzs — to address the cash issue. YRC ranks No.
2 on the Kansass City BusinessJournal ’s list of area public

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