North American logistics giant Yellow plans to file for bankruptcy overnight stock price plunged 28%
Yellow (YELL.O) operates one of the largest and most comprehensive logistics and light truck (LTL) networks in North America, providing customers with regional, national and international transportation services.
The third-largest U.S. trucking company is reportedly preparing to file for bankruptcy as customers abandon the company due to cash shortages and union negotiations . Yellow’s share price plummeted more than 28% after the U.S. stock market overnight.
The company could seek bankruptcy protection as early as this week, but no decision has been made yet, the people said.
“As mentioned earlier, in order to fulfill the fiduciary responsibility of the company’s executives, the company will prepare for a series of potential subsequent emergencies,” said a company employee.
On Sunday, the transportation company resolved a threat of strike by representatives of 22,000 truck drivers after paying more than $50 million in worker benefits and pensions.
The company has faced bankruptcy before. In 2020, the government led by President Trump spent about 700 million U.S. dollars in epidemic relief loans to rescue the company in exchange for a 30% stake.
As reported in June, Yellow faced imminent debt refinancing needs of $1.3 billion, including a $567.4 million term loan due on June 30, 2024, and a $567.4 million term loan due on September 30, 2024. $729.4 million in U.S. Treasury loans. At that time, Yellow was preparing to launch a change plan called “One Yellow” in order to save itself. But the union blocked the plan, and the company filed a lawsuit in the U.S. District Court for the District of Kansas, suing the union, the International Brotherhood of Teamsters (IBT), for intentionally causing Yellow’s economic bankruptcy, And filed a claim of more than 137 million US dollars.
Yellow’s management said: “We do not take lightly in suing the union, but the union’s leadership leaves us with no choice.”
It is reported that Yellow is an important part of the domestic supply chain in the United States, and hundreds of thousands of customers, large and small, rely on the company to provide freight services across the east and west coasts. Once Yellow goes bankrupt, it will seriously damage the supply chain of the market, causing an increase in the price of goods in the LTL market and boosting inflation.