Yellow Corp may be the less-than-truckload operation with nine lives after negotiating with creditors to set aside financial targets as it sped toward a possible bankruptcy. Insiders reported the trucking company was close to running out of cash at the same time the International Brotherhood of Teamsters planned a full-blown strike if a new contract was not in place by Aug. 1.
“We aren’t giving up. Our employees, who have an average of 14 years’ tenure, want us to be here. Our customers want us to be here. Even with all the noise around the company, our shipment counts have held up, and that’s crucial for us to work through this period while we get to negotiations,” Yellow reportedly stated in an email release.
After getting a reprieve for repayment of a $700 million pandemic loan, the company’s stocks rose by 5.83 percent on July 10. At 91 cents a share, Yellow is far below the value it enjoyed starting the year at $2.53. After agreeing to concessions outlined in a U.S. Securities and Exchange Commission filing, it appears Yellow and its 22,000 employees will see another day.
“We are pleased that Yellow has successfully negotiated adjusted (Earnings Before Interest, Taxes, Depreciation, and Amortization) covenant waivers to its existing credit agreement for one quarter with the U.S. Treasury and two quarters with its term loan lenders,” a Yellow email release reportedly stated. “This, along with liquidity preservation efforts such as requesting to defer select health welfare and pension payments for July and August, should give us additional runway to negotiate with the (International Brotherhood of Teamsters) on a solution that provides material wage increases and aligns both parties on modernization of the company.”
Although Yellow garnered some wiggle room, the truck transportation outfit is not out of the financial woods. Reports indicate the Nashville-based operation carries upwards of $1.5 billion in debt and $1.3 billion comes due in 2024. That includes the $700 million Coronavirus Aid, Relief and Economic Security Act loan it acquired as a necessary military and medical supply hauler during the pandemic.
The company recently announced it sold off a California terminal for nearly $80 million and used the revenue to pay down some debt. It also has plans to consolidate entities for better cost-efficiency and integrate automation. That’s the space where Yellow and Teamsters negotiators are not necessarily finding common ground.
https://www.ttnews.com/articles/yellow-gets-financial-waiver
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