Plan Provides Company With Needed Debt Reduction, New Capital
WASHINGTON, Feb. 28, 2011 /PRNewswire-USNewswire/ -- The Teamsters National Freight Industry Negotiating Committee (TNFINC) has approved a restructuring agreement that paves the way to save the jobs of 25,000 YRCW Teamsters and keep the company in business, Teamsters General President Jim Hoffa announced today.
The union reached the agreement in principle on terms for restructuring YRC Worldwide, Inc. with the company and the existing lending group. The terms of the agreement address key conditions—debt reduction and new capital—as set forth by the TNFINC in the Restructuring Plan/MOU and are designed to provide significant liquidity to YRCW to assure operational and job security for the company, its customers and its employees going forward.
"Protecting our members' jobs and health care benefits has been our number one concern at YRCW as the company has struggled," Hoffa said. "Since the Dec. 31 extension, we have been adamant about making sure an additional deadline did not pass without significant progress in YRCW's restructuring efforts. We have some further analysis to do, and the details and definitive documentation need to be finalized, but there is now a clear pathway forward to a healthier YRCW."
This agreement in principle contains two key points from the MOU announcement: 1) debt reduction and 2) new capital infusion from investors, while additionally providing the Teamsters with two seats on the company board of directors. The agreement in principle will also provide meaningful equity ownership in the company for Teamster YRCW members. The terms and conditions of this agreement are also predicated on the successful review of the company's liquidity, financial projections and operational plan by the TNFINC and its advisors.
"When we negotiated, and Teamster YRCW members ratified, the Restructuring Plan/MOU in October, we made it clear that for those contract modifications to stay in place we had to have an important role in the restructuring and we had to verify that the terms would be sufficient for YRCW to operate without constant financial stress for the foreseeable future," said Tyson Johnson, Teamsters National Freight Division Director. "We believe we achieved the best terms possible given the scope and scale of the challenges of the overall economy, in the freight industry and at YRCW. As we have stated before, our number one goal has been and remains achieving a restructuring at YRCW that creates a viable entity that continues to provide good jobs and benefits–and we believe this restructuring agreement puts us in the best position to achieve that goal."
Pending the union's continued review and approval of the effect of the AIP on the company's liquidity and operations, the detailed documents need to be in place by April 29, 2011 and the closing of the transaction is expected to be no later than July 22, 2011.
The International Brotherhood of Teamsters was founded in 1903 and represents 1.4 million hardworking men and women throughout the United States, Canada and Puerto Rico.