Trucking firm Estes Express submits $1.3 bln bid for Yellow’s shipment centers

Trucking firm Estes Express submits $1.3 bln bid for Yellow’s shipment centers

Freight trucking company Yellow files for bankruptcy

Semi truck trailers are pictured at freight trucking company Yellow’s terminal near the Otay Mesa border crossing between the U.S. and Mexico in San Diego, California, U.S., August 7, 2023 after the company filed for bankruptcy protection. REUTERS/Mike Blake/File Photo Acquire Licensing Rights

NEW YORK, Aug 17 (Reuters) – Trucking firm Estes Express has submitted a $1.3 billion bid to acquire bankrupt Yellow Corp’s shipment centers, attorneys said on Thursday at a U.S. bankruptcy court hearing.

Yellow’s attorney Allyson Smith said the Estes proposal was received while Yellow was negotiating several offers for bankruptcy financing.

Estes had offered to provide a bankruptcy loan as part of its bid, but Yellow instead decided to move forward with a $142.5 million loan provided by hedge fund Citadel and MFN Partners, which is Yellow’s largest shareholder, Smith told U.S. Bankruptcy Judge Craig Goldblatt at a hearing in Wilmington, Delaware.

The new loan contemplates a 180-day period for Yellow to solicit higher bids for its real estate assets and sell its fleet of trucks. Estes’ offer for Yellow’s shipping terminals comes close to covering all of Yellow’s pre-bankruptcy debt, including more than $700 million owed to the U.S. Treasury Department for a 2020 pandemic relief loan, Smith said.

Citadel stepped into the picture in recent days, buying out approximately $500 million in pre-bankruptcy debt that Yellow owed to Apollo Global Management.

Apollo initially offered to fund Yellow’s bankruptcy with a $142.5 million loan, but instead bowed out after Yellow received competing offers with lower fees and interest rates.

The new financing provided by Citadel and MFN will save Yellow between $27 million and $40 million in fees when compared with the Apollo loan, and it will also provide Yellow with twice as much time to sell its assets, Smith said.

Yellow will submit the new loan to Judge Goldblatt for approval once the details are finalized, Smith said.

Yellow filed for bankruptcy on Aug. 6 with just $39 million cash on hand, which the company said was not enough to run a months-long bankruptcy sale for its 12,000 trucks, real estate holdings and other assets.

Yellow blamed its collapse on a labor dispute with the International Brotherhood of Teamsters union. The union, which represents about 22,000 Yellow employees, said the Nashville, Tennessee-based company “mismanaged” its way to bankruptcy.

Reporting by Dietrich Knauth; Editing by Chris Reese, Cynthia Osterman, Alexia Garamfalvi and Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

Read More

Leave a Reply

Your email address will not be published.