Posted on 07/01/2020 12:39:44 PM PDT by Perseverando
YRC Worldwide (NASDAQ: YRCW) unveiled plans of a new $700 million lending agreement with the U.S. Department of the Treasury, which in turn will receive a stake of nearly 30% in the company.
The July 1 press release outlines the latest lifeline for the less-than-truckload (LTL) carrier. The loan comes from a federal lending program under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which is intended to help businesses survive the economic downturn caused by COVID-19 and maintain employment for their workers.
The lending agreement will allow YRC to repay recently deferred health and welfare and pension payments to the funds that support its 24,000 Teamster employees, including the underfunded Central States pension and health funds in which YRC is the largest contributor. The loans will also allow the carrier to make updates to its aging fleet.
Some may also see this as a bailout of Apollo Global Management (NYSE: APO), which provided YRC with a $600 million term loan in September.
"We would like to thank Congress for passing the CARES Act and the U.S. Department of the Treasury for providing this vital funding which recognizes the essential role YRCW plays in the nation's supply chain. 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," said YRC CEO Darren Hawkins.
(Excerpt) Read more at finance.yahoo.com ...
This is very bad. Once government starts owning significant percentages of our companies, the US experiment is over.
Take all of the YRC company trucks out of the Teamsters Union and make them be owner operators, especially for line haul.
No question about that. YRC now backed by the full faith and credit of the U.S. Government. Good luck with that.
Absolutely!
It might be interesting to have the truckers boycott the ‘Rat urban utopias for a while.
>>Gotta keep those trucks moving to keep stuff on the shelves.
>>>>The lending agreement will allow YRC to repay recently deferred health and welfare and pension payments to the funds that support its 24,000 Teamster employees
Gotta bail out the commie labor unions once again...
Yeah, we wouldn't want anyone in the Labor Department to get a couple of broken arms and some cement overshoes.
This is similar to what Japan did in the 80s (?). Banks investing in corporations.
This is a really bad idea. This is like the gov’t deciding “you live”, but “you don’t”.
Very bad idea. And the GM bailout and others were all bad ideas as well.
It’s better for the Treasury to hold it in a blind trust as they will, then for the Fed to own it and be out of sight of the public view.
This trucking company has been a zombie operator for several years now. Been on financial life support since 2009 at least.
Apollo Global Management group will get their money, one way or the other. The problem with the vast majority of these investment groups is that they actually think they know how to run a business when they really have no clue. The vast majority of private equity firms for example like to tout their expertise as ‘operators’ but usually don’t know the first about running anything within the business other than how to put a deal sheet together and charge fees.
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