As mentioned earlier, some analysts believe transport logistics firm YRC Worldwide (YRCW) can still find a way to carry out a debt-for-equity swap and avoid bankruptcy.
For a different perspective, Stifel Nicolaus’s David Ross thinks the company’s headed for bankruptcy anyway. Today’s extension of the deadline for the debt swap is the last extension, he argues, pointing out the company has to pay $19 million in fees and interests on debt tomorrow, which it won’t be able to do without getting access to its bankers’ $106 million in additional liquidity.
If the company doesn’t get the debt swap done tonight, it could close its doors as early as this weekend.
But even if the exchange goes through and the interest gets paid, “we believe the company may still burn through all of its cash and borrowing capacity in the next two months, as customers are getting increasingly nervous about having their freight stranded in YRC’s network.”
YRC “will be open for business as usual on Monday,” YRC spokesperson Suzanne Dawson said in an emailed statement.
YRC shares closed down 5 cents, or 4%, at 99 cents.
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