YRC hopes to sidestep bankruptcy with stock exchange plan

OVERLAND PARK, Kan. — In its latest effort to stay afloat and keep competitive sharks at bay, YRC Worldwide has launched an exchange program to unload debt instruments in exchange for the company’s common stock and new Class A Convertible Preferred Stock.

Through the transaction, North America’s largest LTL carrier would trade about $536.8 million in debt for about 95 percent of its equity.

The effort, if successful, would help stave off bankruptcy and put the company in a more solid financial position by improving its capital structure, decreasing its cash interest expense and enhancing its near-term liquidity, YRC said in a statement.

The move, "in concert with other steps taken over the recent past to improve its operations and cost structure, will make it more competitive and position it to take advantage of any upturn in the economy," the company said.

The embattled company has struggled to hold on to its leading market share position as competitors slash rates partly as an attempt to price YRC out of business.

At its peak YRC controlled as much as 20 percent capacity in the $35 billion U.S. LTL freight market.

The company has set a Dec. 7 deadline on the offer.

If the plan doesn’t work, the company said it would seek relief under the U.S. Bankruptcy Code, according to the Kansas City Business Journal, citing a Securities and Exchange Commission filing.