The US Treasury is giving a $700 million loan to YRC Worldwide, a troubled trucking company that in May warned it was in danger of going out of business.
That’s an HUGE sum for a company whose stock had plunged 27% this year and was worth only $70 million as of yesterday’s close.
Competitive problems had taken the company’s stock down 85% over the last five years, but shares of YRC more than doubled in value in pre-market trading on the news of the bailout by the Fed.
Treasury’s statement said the loan was justified by the fact that the company provides a majority of the trucking services moving pallet-sized shipments of freight for the US military, a segment of the industry known as
The US Treasury in its statement,
“Treasury’s determination was based on a certification by the Secretary of Defense that YRC is critical to maintaining national security.”
CEO Darren Hawkins in a statement,
“Our 30,000 employees have continued to serve hundreds of quarantined communities across the country during the pandemic and this financial assistance will enable us to bridge this pandemic-related crisis and continue to provide essential shipping services for the nation’s supply chain.”
The loan will be due in 2024.