YRC Worldwide Reaches Deal To Reduce Debt By $300 Mln - Quick Facts

(RTTNews) - YRC Worldwide Inc. (YRCW) announced Monday that it has reached an agreement with certain holders of its Series A Convertible Notes, Series B Convertible Notes and other institutional investors that will allow it to reduce debt by about $300 million.

In doing so, the company said it will meet a primary requirement (retiring at least 90% of the company's Series A and B Convertible Notes) needed to satisfy the International Brotherhood of Teamsters' (IBT) conditionality of ratifying the Memorandum of Understanding or MOU proposal that is currently out for ratification by the company's employees who are IBT members.

However, the agreement will still remain contingent on getting the MOU proposal ratified by its members. The vote on the MOU is anticipated to be complete on January 8, 2014 and results will be available shortly thereafter. In addition, the debt reduction deal is contingent on getting holders of at least 90% of the $124 million of the company's pension fund debt to amend and extend the currently outstanding note.

As per the agreement, the investors will invest $250 million in cash for newly-issued shares of common stock of YRC Worldwide at a price of $15.00 per share. The proceeds will be used to pay off the existing 6% Convertible Notes due February 2014 and defease and/or pay off the existing Series A Convertible Notes due March 2015.

In addition, holders of approximately $50 million principal amount of the existing Series B Convertible Notes due March 2015 will convert those notes to common stock at a price of $15.00 to $16.01 per share, further reducing debt. The Series B Note holders that participate in the proposed transaction will also consent to amend the indenture to remove substantially all covenants and release the collateral securing those notes. The remaining Series B Convertible Notes may continue to be outstanding until their scheduled maturity of March 31, 2015. Consummation of the agreement is subject to a number of other customary conditions as well.