YRC Worldwide -YRCW-shares used to pay debt

YRCW – YRC Worldwide Inc. plans to issue as many as 4.9 million shares of stock to pay the interest on $70 million in debt it sold this spring.

The Overland Park-based trucking company (Nasdaq: YRCW) said in a securities filing Monday that the semiannual interest payment is due on Aug. 15. It sold the convertible senior notes in a private placement to pay off earlier rounds of debt coming due this year.

Under terms of the private placement, YRC must pay interest of $28.67 per $1,000 in principal, or $2 million.

At Monday’s closing price of 41 cents a share, that would equal 4.88 million shares.

YRC already has more than 1 billion shares outstanding after agreeing to turn over a majority of the company’s stock to bondholders who agreed to exchange debt for equity. Also, the company has issued thousands of shares for its union employees, who agreed to a number of wage and benefit concessions last year. Both moves were considered key to helping keep YRC out of bankruptcy.

CEO Bill Zollars has said YRC will implement a reverse stock split this year to reduce some of the excess stock and hopefully get the stock price back above $1. It has until Aug. 30 to achieve that price for 10 consecutive trading days or have its stock delisted by the Nasdaq stock exchange.

YRC is scheduled to release second-quarter financial results Tuesday morning. Analysts surveyed by Thomson Reuters are expecting YRC to post an 8 cent a share loss on $1.2 billion in revenue.

davidtwiddy@bizjournals.com-Kansas City Business Journal

YRC Worldwide will issue shares to pay interest on $70M in debt