YRC Shares Sink After Debt Exchange

NEW YORK (AP) — YRC Worldwide Inc. shares plunged more than 50 percent Monday after the struggling trucking company said it is launching a debt exchange offer that could drastically reduce current shareholders' stakes.

The move is part of YRC's effort to get access to cash and avoid a bankruptcy filing, which has been rumored for months. It has struggled to integrate two of it units and suffered through a dramatic falloff in freight demand amid the recession.

YRC runs trucks under the Yellow, Roadway, New Penn and Holland names shipping everything from refrigerators to clothing across the U.S. through a huge network of terminals.

Overland Park, Kan. YRC said it intends to launch an exchange offer of $536.8 million in 8 1/2 percent notes for common and preferred stock equal to 95 percent of its common shares, with a provision to give stock options to the company's union employees. YRC offered options equal to 15 percent of the company's common stock to union workers in exchange for wage and pension cuts earlier this year.

The trucking company had about $1.69 billion in liabilities, but only about $1 billion in assets as of Sept. 30. YRC has sold real estate, cut thousands of jobs and renegotiated terms of its debt to stay afloat. On Friday, the company said it lost $158.7 million, or $2.67 per share in the third quarter.