NEW YORK (Reuters) – Trucking firm Estes Express has made a $1.3 billion bid to acquire the freight centers of bankrupt Yellow Corp, lawyers said on Thursday at a U.S. bankruptcy court hearing.
Yellow’s attorney, Allison Smith, said Estes’ offer was received while Yellow was negotiating several offers for bankruptcy financing.
Estes offered to file a bankruptcy loan as part of its bid, but Yellow decided instead to move forward with a $142.5 million loan provided by Citadel hedge fund and MFN Partners, which is Yellow’s largest shareholder, Smith told US bankruptcy judge Craig Goldblatt at a hearing in Wilmington, Delaware. .
The new loan envisages a 180-day period for Yellow to obtain higher bids for its real estate assets and to sell its fleet of trucks. Smith said Estes’ bid for Yellow’s charging stations comes close to covering all of Yellow’s debts prior to bankruptcy, including more than $700 million owed to the US Treasury for the 2020 pandemic relief loan.
Citadel has stepped into the picture in recent days, buying up nearly $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 withdrew after Yellow received competing offers with lower fees and interest rates.
The new financing from Citadel and MFN will save Yellow between $27 million and $40 million in fees compared to the Apollo loan, Smith said, and give Yellow twice as much time to sell its assets.
Smith said Yellow will present the new loan to Judge Goldblatt for approval once the details are finalized.
Yellow filed for bankruptcy Aug. 6, with only $39 million in cash on hand, which the company said wasn’t enough to trigger a months-long sale that bankrupted 12,000 trucks, real estate and other assets.
Yellow blamed its collapse on a labor dispute with the Muslim Brotherhood International Union. The union, which includes about 22,000 yellow employees, said the Nashville, Tennessee-based company “mismanaged” its path to bankruptcy.
Reporting by Dietrich Knauth; Editing by Chris Reese, Cynthia Osterman, Alexia Garamfalfi, and Jonathan Otis
Our standards: Thomson Reuters Trust Principles.
“Web maven. Infuriatingly humble beer geek. Bacon fanatic. Typical creator. Music expert.”