YRC Worldwide Inc. (YRCW) has announced that the United States Department of the Treasury (“UST”) intends to provide a $700m loan to the company under authorisation provided by Subtitle A of Title IV of the CARES Act.
YRCW and its operating companies Holland, New Penn, Reddaway, and YRC Freight have been significantly impacted by the COVID-19 pandemic. These companies collectively employ 30,000 trucking professionals, including 24,000 Teamsters. The CARES Act assistance will be used to pay for deferred employee healthcare and pension costs and other contractual obligations as well as to support essential capital investment.
YRCW CEO Darren Hawkins thanked Congress for passing the CARES Act and for the funding as well as recognising YRCW’s role. Hawkins said, “Through our work with over 200,000 customers, including being a leading transportation provider for the Departments of Defense, Energy, Homeland Security, and Customs and Border Protection, YRCW’s freight professionals have developed a deep understanding of, and expertise in, the importance of a secure and reliable supply chain.”
YRCW has entered into an agreement on 30 June, under which UST will receive 29.6% fully diluted equity ownership in YRCW (pro forma for dilution from the UST equity issuance), described in further detail below, in connection with the loan from UST to YRCW.
YRCW will receive a loan of $700m in two tranches, subject to completion of definitive documentation:
YRC’s existing credit facilities are expected to be amended to permit the new loan.
The financial assistance will enable the company to bridge this pandemic-related crisis and continue to provide essential shipping services for the nation’s supply chain. The funding will also enable it to continue successfully implementing its multi-year strategic plan to transform its five powerful brands to operate as ONE Company.
Source: YRC Worldwide
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