YRC had hoped to avoid payment of some $21.7 million outstanding on two sets of convertible senior notes. The company said Tuesday in a filing with the Securities and Exchange Commission that it may appeal the ruling by the U.S. District Court in Kansas City, Kan.
The money is owed to Deutsche Bank Trust Co. Americas as trustee for the noteholders. The next payment is due Aug. 9.
YRC said it expects its principal source of funds to pay on the notes coming due next month would have to come from the issuance of an additional $20.2 million of its 6 percent convertible senior notes.
YRC said if it could not raise money from investors it would have to use existing cash or obtain other third party unsecured debt or equity financing. YRC warned in the SEC filing that it may not have "sufficient cash" to meet the obligation.
Last December, YRC was on the verge of bankruptcy when it negotiated a $470 million debt-for-equity swap with most of its bondholders that allowed the company to restruture its finances.
A small group of bondholders refused to agree to a change of terms, however, and are trying to hold YRC to the payment terms.
YRC officials said last month that business volumes were increasing amid a broad restructuring, but acknowledged facing continuing liquidity pressure.
YRC, which is the largest U.S. trucking company handling smaller, or less-than-truckload shipments, has laid off thousands of workers and cut deals with labor and lenders over the last year and a half trying to survive a downturn in the economy and a heavy debt load tied to a string of acquisitions. (Reuters)
