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TheStreet Open House

YRC Worldwide's Aggressive Push May Not Be Enough

OVERLAND PARK, Kan. ( TheStreet) -- YRC Worldwide (YRCW) is making an aggressive bid to win over shippers scared away by bankruptcy concerns, but even customer gains may not outweigh risks for investors and support the trucking giant's flagging share price.

Earlier this week, YRC Worldwide introduced an automatic money-back guarantee to shippers that deliveries will be made on the scheduled day of service or the company will offer a full refund.

The new guarantee is a transparent move, one made to assuage customer concerns sparked by YRC Worldwide's brush with bankruptcy. Shipping customers fled YRC Worldwide for a number of competitors, including ConWay (CNW - Get Report), FedEx (FDX - Get Report) and UPS (UPS - Get Report), as the company struggled with liquidity concerns.

YRC Worldwide is also working to regain billions in revenue lost since 2006 by directly addressing customers' potential doubts with an ad campaign. This comes after YRC Worldwide completed a massive debt-for-equity swap that saved the transportation company from drowning at the very end of 2009.

On Dec. 31, after six deadline extensions, YRC Worldwide finally completed a debt-for-equity offer that saw noteholders tender $470 million in debt, representing approximately 88% of the company's outstanding notes. The exchange was a nightmare for existing YRC Worldwide shareholders, as the stock has plummeted nearly 80% since Nov. 2, when the exchange offer was first announced, due to the threat of dilution.

Immediately following the tender offer's completion, YRC's Chairman and CEO Bill Zollars said that with a restructured balance sheet and enhanced liquidity, the company could move forward with a more solid financial foundation. He reiterated those comments in an interview with Dow Jones Newswires earlier this month, adding that bankruptcy is "not on the radar screen" and that customers "are returning pretty aggressively."

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SYM TRADE IT LAST %CHG
CNW $43.66 0.00%
FDX $164.59 0.00%
GS $188.06 0.00%
UPS $96.59 0.00%
YRCW $18.23 0.00%

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S&P 500 2,061.02 +4.87 0.24%
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