YRC Worldwide Inc. said Thursday it extended the deadline for its proposed debt-for-equity exchange for a third time and lowered its threshold for acceptance because it failed to get enough of a response.
The offer, set to expire on Thursday night, was extended to midnight Dec. 23. The company previously needed 95 percent approval for its swap of stock for $536.8 million in debt. The offer includes 5 percent convertible notes due in 2023, 3.375 percent convertible notes due in 2023, and 8.5 percent guaranteed notes due April 15, issued by subsidiary YRC Regional Transportation Inc.
With today's announcement, YRC needs 70 percent of holders to swap the 8.5 percent guaranteed notes and 85 percent to swap the convertible notes.
YRC said 75 percent of note holders tendered their notes before Tuesday, but as of Thursday, a number of bondholders withdrew their tender _ leaving only 57 percent support.
"This moves the company backwards in its efforts to restructure out of court and again increases the probability of a bankruptcy filing in the near-term," Stifel Nicolaus analyst David Ross said.
If the exchange is successful, it will give 95 percent of the company's outstanding shares to note holders, drastically reducing current shareholders' stakes.
But it will also give the company access to cash it needs to avoid filing for bankruptcy protection.
"Even if the company were to complete its debt exchange, there would be higher hurdles in place, which we believe would be very difficult for the company to clear," Ross said.
The company said that if it does not complete the debt exchange by Dec. 31 its "liquidity position would become unsustainable."