Yellow On The Brink: Asset Sale Through Bankruptcy Looms

Distressed trucking firm Yellow Corp. YELL is reportedly contemplating an asset and real estate sale via a bankruptcy filing, potentially happening as soon as this weekend, sources close to the matter reveal.

A potential financial bidder has already shown interest in the assets of the struggling trucking company, as Bloomberg reports.

Shares of Yellow Corp. were down slightly on Friday, ending the week with an astounding 346% gain.

Uncertainty Surrounds Yellow Corp.’s Future

The company, a less-than-truckload carrier that handles shipments not filling an entire trailer, has been on the brink of bankruptcy in recent weeks. It informed its employees on Monday about its impending shutdown, according to the labor union representing Yellow’s drivers.

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Financial Challenges and Potential Lifelines

Yellow is grappling with over $1 billion in debt due next year, which it has found challenging to refinance. Creditors, led by Apollo Global Management Inc. APO, are reportedly close to striking a deal to inject fresh cash into Yellow during the anticipated bankruptcy.

In the event of bankruptcy, the U.S. government is expected to be Yellow’s largest creditor, thanks to a contentious $700 million aid package provided during the pandemic. Yellow has pledged to repay the government loan in full, backed by collateral on all the company’s real estate and vehicle stock.

The Impact on the Trucking Industry

With around 30,000 employees, Yellow is the third-largest less-than-truckload carrier in the US. However, according to Bloomberg Intelligence analyst Lee Klaskow, such shippers rarely avoid liquidation when they file for bankruptcy.

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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