Tuesday, December 8, 2009

US Trucking Giant YRC To Drop From Dow Jones Index

LTL Carrier to be Deleted from Transportation Average this month
Shipping News Feature

US – As YRC Worldwide struggles to convince the required 95% of its bondholders it requires to reschedule its debts today, comes the news that the company will be removed from the Dow Jones Transportation Average with effect from 11th December and replaced by Delta Airlines.

YRC need the acceptance of their bondholders to support their debt for equity exchange which would give the creditors around 95% of the company’s common stock holding. If the bid fails YRC, the country’s leading less than truckload (LTL) haulier could conceivably need to file for bankruptcy protection after months of doubt and confusion. Only support from lenders and the trades unions have allowed the company to continue trading.

Today the tender offer to bondholders expires and whilst YRC management appear confident that they will gain enough support to eliminate around $550 million of debt from their books not all industry observers are so sure, hence the elimination from the Dow Jones. If the group are forced to file for protection whilst they renegotiate their loans then suspension from the Index would be mandatory.