Transportation firm YRC Worldwide is in the final countdown to restructure it troubled finances and analysts are growing pessimistic that the firm will survive into the new year.
The struggling firm, the nation's largest less-than-truckload carrier and parent to such names as Roadway and Yellow, announced Friday that it is extending the deadline for a debt-for-equity offering to Dec. 23. It is the third time this month the firm has reset the deadline.
YRC, which faces a $19 million debt payment and loss of access to a more than $100 million revolving credit line as of Jan. 1, 2010, has been offering shares of the firm to bondholders in exchange for improved debt terms.
Officials for YRC have said that the firm might have only days left before its liquidity becomes “unsustainable” and would have to contemplate bankruptcy “or worse,” if it has to make the New Year's debt payment and loses access to the revolving credit line.
The firm, which set an original deadline of Dec. 7 for the needed $537 million debt-to-equity swap, said it has thus far fallen far short of the mark. The swap, according to YRC, is the key component of financial restructuring plan the firm says is vital to its continued existence.
“We believe that the odds of YRC filing for bankruptcy and exiting the industry have gone up considerably,” said industry analyst Ed Wolfe in a report to investors issued Friday. Calling YRC's position “dire,” Wolfe recommended buying up shares of YRC rivals.
“The jig may be up,” for YRC, wrote Wolfe.
