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TForce | YRC leaseback deals

Overnite

Overnite

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Estes purchased some of YRC's terminals at first I thought it was the terminals that were not being used becuase of the merger, but on further research, Yrc sold some of there current terminals and is leasing them back from estes, that doesn't sound like a positive thing, unless they ae so strapped for cash they needed the money upfront even though it is gonna cost them more down the road.

Here is the details Yrc sold an unspecified # of terminals for $122 million to Estes, Estes is leasing the terminals back to YRC for $11 million a year, there all 10 year leases with 10 year renewal options.

Basically they refinanced there house that they owned free and clear to get some cash in there pocket and over time there gonna pay more then they received.

$11 million a year for 10 years = $110 million adjusted for inflation there gonna lose money. This is a hailmarry play, there is only 1 reason a company would do this.
 
One of the ways to look at it is if yrc did not sell the terminals then filed bankruptcy the creditors could of sold the terminals to repay thereself. By yrc selling them now they already pocketed the money, what do people think yrc is gonna do in 10 years once the leases are up? Buy new terminals?
 
Overnite said:
One of the ways to look at it is if yrc did not sell the terminals then filed bankruptcy the creditors could of sold the terminals to repay thereself. By yrc selling them now they already pocketed the money, what do people think yrc is gonna do in 10 years once the leases are up? Buy new terminals?
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Read further dude. They have 2 more ten yr. options in the contract. Teamster Elvis out....
 
Yes they could extend the lease 10 more years that would mean more money out of there pocket before they commit to purchasing a terminal, when they already owned it to begin with.
 
the old man that owned overnite did this with a lot of trucking companies. McLean(?) for 1 . he did this and now where did you think the ric,ind,cin and others come from? look at them. they are all alike. we didn't build them like that. when they went under he didn't loose money, he got the equipment and properties instead of money that they didn't have when they went under.
smith, halls, and so many others. smart for a man with a 6th grade education.
 
the old man that owned ovenite did buy other trucking companies properties and leased them back to themselves, and did it in cash!
 
Overnite said:
One of the ways to look at it is if yrc did not sell the terminals then filed bankruptcy the creditors could of sold the terminals to repay thereself. By yrc selling them now they already pocketed the money, what do people think yrc is gonna do in 10 years once the leases are up? Buy new terminals?
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I think I read somewhere that they cannot sell anything without bank approval. If that is true the money was used for operating cash or given to the banks to pay down debt.
 
RevItUp said:
I think I read somewhere that they cannot sell anything without bank approval. If that is true the money was used for operating cash or given to the banks to pay down debt.
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Yes the creditors will only let yrc sell so much assets, anything over a certian amount had to go to pay them.
 
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