© Reuters. Semi truck trailers are pictured at freight trucking firm Yellow’s terminal close to the Otay Mesa border crossing between the U.S. and Mexico, after the corporate filed for chapter safety, in San Diego, California, U.S., August 7, 2023 REUTERS/
By Dietrich Knauth
NEW YORK (Reuters) -Trucking agency Yellow Corp will prolong negotiations on a chapter mortgage till subsequent week, searching for to discover no less than two different mortgage proposals that would offer $142.5 million in new money, the corporate’s legal professional stated in court docket on Friday.
Yellow filed for chapter on Sunday with a mortgage provide for that quantity from non-public fairness agency Apollo, a senior lender to the corporate earlier than its chapter. The trucking firm stated earlier this week it was searching for different financing from MFN Companions, an funding agency that owns 41% of Yellow’s inventory, and Estes Categorical Strains, a rival in freight trucking.
Yellow is continuous to barter these presents, and it has acquired further mortgage presents up to now few days, Yellow’s legal professional Pat Nash informed U.S. Chapter Choose Craig Goldblatt at a Friday court docket listening to in Wilmington, Delaware. Yellow will possible select one of many loans, that are “rather more favorable” than Apollo’s preliminary proposal, by early subsequent week, Nash stated.
Yellow intends to make use of its chapter to promote all of its belongings, together with 12,000 vans and over 300 delivery service facilities.
The brand new loans can be junior to $1.2 billion in loans from Apollo and the U.S. Treasury Division, which have claimed all of Yellow’s automobiles and actual property as collateral on their loans, Nash stated.
Yellow is making an attempt to get the senior lenders’ consent to tackle further debt, he added.
Yellow has stated it believes it could actually totally repay Apollo and the U.S. Treasury Division.
MFN’s earlier proposal would have put its new mortgage on an equal footing with Apollo’s roughly $500 million debt, which Apollo opposed. Apollo’s legal professional Dennis Dunne stated on Friday his shopper is “completely prepared” to work with new lenders so long as its collateral rights usually are not diluted.
Yellow blamed its collapse on a labor dispute with the Worldwide Brotherhood of Teamsters union, and it ceased all operations within the weeks earlier than it filed for chapter. The union, which represents about 22,000 laid-off Yellow workers, stated the Nashville, Tennessee-based firm “mismanaged” its solution to chapter.
Yellow owes the U.S. Treasury over $700 million on a pandemic bailout mortgage permitted by former President Donald Trump’s administration in 2020.
