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Strategies & Market Trends : The coming US dollar crisis
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To: ggersh who wrote (23909)11/2/2009 7:41:08 PM
From: RockyBalboa  Read Replies (1) of 71475
 
Financial engineering at work, a while back you asked about YRCW. See below (stock dived today)

>>>>

UPDATE 2-YRC shares dive 64 pct on debt exchange offer

(Contains language in 15th paragraph which may be offensive to some readers)

* Shares plunge 64 percent to $1.32 on exchange details

* Shares outstanding could rise to 1.6 bln from 60 mln

* Successful exchange to open up $106 million reserve

(Adds S&P downgrade, company comment and details)

By Carey Gillam

OVERLAND PARK, Kan., Nov 2 (Reuters) - Shares of major U.S. trucking company YRC Worldwide sank 64 percent on Monday after the company revealed that a debt exchange offer it is making may lead to the issue of a massive number of new shares and hand over the bulk of the company to noteholders.

Based on the terms of the offer, which is seen as vital for the survival of the company and is a contingency for several lender agreements, YRC may have to issue up to 1.6 billion new shares, or nearly 27 times the about 60 million currently outstanding, analysts said.

Shares closed down 64 percent at $1.32 on the Nasdaq on Monday after YRC revealed details of the exchange offer, and said it would move immediately to seek shareholder approval.

"We think that YRCW is down to the last bullet in its gun as evidenced by the dilution associated with this proposed debt-for-equity swap," RBC Capital Markets analyst John Barnes wrote in a note to investors on Monday.
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