So I think the BK is off the table for now. Next big hurdle is how much dilution. Trying to think about how to think about this:
Company needs to raise $350 million, $300 to retire debt and $50 to give to Teamsters (they'll pay in stock not cash) so how many shares is that? Today the whole company is valued at 182 M so apparently the new shareholders have to beleive it is worth more than that right (at least the debt holders, the teamsters is just a give away anyway). If I have $300 M debt how much of this company am I willing to share to retire my debt? 25% between Union and current shareholders?
If that were right they would issue another 450 million shares 400 for debt, 50 for union. Total outstanding would be 500 million shares. I think this company could make $50-75M in 13 or 14 so lets assume high and go $75M.
75M/500M share = .15 per share x 8 = 1.20 value per share.
That would value the debt at $480M (400M shares x 1.20 per share) a nice profit off $300M in debt.
Is that more than debt would ask for or about right
will Union get an amount = to existing shareholders or is that too high
Does YRCW need to convert $300M or less
Would a bank really do the conversion?
Course the problem is that says our shares are only worth $1.20 under this concept, would the stock still hang near $4 if my thoughts are right (course GM kept trading until the bitter end and that was much more obvious than this deal)
They didn't get themselves into this overnight so I don't think they're going to get themselves out of this quickly. However, they are moving in the right direction. For the time being they've stopped the bleeding somewhat, signed a new agreement with the union and got rid of that stoopid lawsuit. I guess the next steps will be a new CEO and announcing they refinanced their debt. All this take time.
I work for a company that went BK a few years back. The company wasn't bad, just made some silly mistakes. Got into too much debt and got hit by a bad sales environment at the same time. A few changes were, new CEO etc and now were more profitable than ever, have no debt and sales have been increasing in double digits even through the recession. Bottom line...just be patient.
you know theyve worked through this knowing abf suit was garbage-in typical abf incompetent fashion theyll release good news after shorts cvan get seated.
12.50 was good for zollars, let hoffa get us sold for that-with the sloick abf deal noone can be strusted and teamsters wont hold yrc feet to fire over 300 mill i bet
marduke - I agree and in fact I'm not sure the board is authorized to issue that many shares, but they do have to convert some debt and they did sign a contract with the teamsters, those players don't go away for nothing and the company could argue that there is an infinite diff between $1 and $0.
The company will be sued, but hell that always happens, it would be pretty hard to argue they did not warn us, many times that they were at risk of BK
i have to disagree regarding the warning of BK, fairly standard boilerplate. We will have to see if for one Zollars is thrown out as promised and then whether they can get bonds issued to cover some of the debt. 300 million in stock seems a bit much- and they have already wiped out shareholders with the precious D/E, there is such a thing as fiduciary duty which they i am sure are considering. We will hzve to wait and see. I would not buy thios issue until this si worked out and the habit or management to play around with releases isnt a very good idea.
another thought, I would think the company thought about this during RS so it is intersting this keeps them above a $1 PPS but it is awfully close so you would think they would have RS even higher multiple but then maybe they just blew it