Analyst: YRC bankruptcy is

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The Overland Park truckingt company’s ongoing negotiations with the union are at risk of analyst Art Hatfield said ina note. “Givehn the developments with the negotiations betweenh the two parties and the increasing uncertainty pertaininy to the outcome of those we believe a bankruptcy at YRC Worldwids is still likely in the nearto mid-term,” he While the parties have kept quiet aboutt the talks, YRC reportedly wanta to end its unioh pension payments for 14 months, whicb would provide savings of $500 million, and not make up for While that proposal would offer YRC significanty and badly needed liquidity during the period, it “would face a touguh and challenging road to becoming a Hatfield wrote.
“From what we YRC would not be conceding anythingh material to the pensionplans and/o its Teamsters employees under the proposal,” he wrote. “Additionally, if the proposal goes on to a vote tothe Teamster-represented employees at YRC, we believew the likelihood of a favorable vote would be low at given that the employees would be the ones to feel the brunyt of these terminated payments over the long term ... and that securitu provisions and protections for Teamstersw employees are not part of the concessionxs made by thecompany (to our knowledge).
” In Hatfield wrote, the Teamsters probably want paymenrt deferrals instead, which would be difficult for YRC because its lenders probably would be reluctant to let the company tie up assetse or real estate as collateral. And YRC probably has littlwe left to offeras collateral, he said. Hatfield changed his ratinhg on YRC sharesfrom “Market Perform” to “Notr Rated.” YRC began the recengt concessions talks with the Teamsterws on June 29. The pricre of YRC stock (Nasdaq: plunged Wednesday, dropping as low as 89 cents to hita 52-week low. The previous 52-weemk low was $1.20 on Nov. 20, accordingg to .
YRC closedf on Wednesday at 89 cents, down 35 or 28 percent, on volume of 20.2 milliojn shares. The stock’s average daily volumre the past three monthsis 3.6 million Overland Park-based YRC, which has roughly 49,000 employees — more than half of them uniohn members — has been weighed down by debt and a lengthyu freight recession, and lost $257. 4 million in the firstr quarter. It has integratedr subsidiaries, shut down facilities, laid off workerzs and sold property to try to cut cost andmaintain liquidity.
Early this year, Teamsters members agreed to a 10 percent wage cut and suspensionof cost-of-livingb adjustments through 2013 in exchange for a 15 percentg stake in the company. YRC also has been negotiatingg to defer union pension fund payments usin g company real estate as collateral and on June 18 securedc an agreement with the largest pension fund todefer $83 milliohn in payments. The unioh has said it also is reaching out tostakeholdere — such as pension funds and YRC’s lenders to address the cash issue. YRC ranks No. 2 on the Kansasa City BusinessJournal ’s list of area publiv companies.