Shares of YRC Worldwide tumble 29 percent after change in stock rules By RANDOLPH HEASTER The Kansas City Star
Analyst upgrades YRC Worldwide to a ‘buy,’ based on depressed price After a brutal 2009, auto industry suppliers are increasingly optimistic Shares in YRC Worldwide fell 29 percent Wednesday after shareholders approved changes allowing the company to issue more common shares as part of its restructuring.
YRC fell 16 cents in heavy trading to 39 cents a share. More than 108 million shares exchanged hands.
The approval percentage rate was in the mid-50s, said Bill Zollars, chairman and CEO.
The vote took place Wednesday at a special shareholders meeting at YRC’s Overland Park headquarters.
The authorization means YRC will issue about 2 billion shares of common stock in addition to the nearly 100 million now trading. The trucking firm plans to conduct a reverse-stock split to proportionally reduce the number of common shares.
The reverse split is expected in the first half of the year, but not within the first 60 days after the new shares are issued, the company said.
“What we want to do is let the share price trade for some time and find a settling point before determining what the reverse-stock split will be exactly,” Zollars said.
When the restructuring is completed, bondholders holding about $470 million in YRC debt will control about 94 percent of the company’s common stock.
“The stockholder approval satisfies an important condition to closing our recently announced agreement for a private placement of $70 million in new convertible notes,” Zollars said in a statement. “We thank our stockholders for their support.”
Some of the proceeds from last week’s financing will help pay off $45 million in bonds that were not converted in YRC’s debt-for-equity exchange at the end of 2009.
Meanwhile, Zollars said the new board of directors was expected to be appointed by the end of March.
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