MW: Trucking company YRC to get $700 million CARES Act loan, stock rockets

02/07/2020

MARKETWATCH reports:

Shares of trucking company YRC Worldwide YRCW, +74.59% rocketed 75% in premarket trade Wednesday, after the company said it expects to receive a $700 million CARES Act loan from the U.S. Treasury. “YRCW and its operating companies Holland, New Penn, Reddaway, and YRC Freight have been significantly impacted by the COVID-19 pandemic,” the company said in a statement. The companies employ 30,000 drivers, including 24,000 members of the Teamsters union, it said. The company will use the funds from the bailout plan to pay healthcare and pension costs and meet other contractual obligations and to support essential capital investment. In return for the loan, the U.S. Treasury will receive a 29.6% equity stake in the company. Shares have fallen 27% in the year to date, while the S&P 500 SPX, +0.50% has fallen 4%.

– The stock closed at $3.23 Wednesday, up 74.6% for the day.

– You may also want to read this: “YRC gives government 30% stake in its latest financial bailout“.

– External funding aid had to be expected. Last summer we wrote “YRC is stressed – anybody interested?“. Please find our full YRC Worldwide coverage here.