YRC leaseback deals

Discussion in 'UPS Freight' started by Overnite, Mar 2, 2009.

  1. Overnite

    Overnite Active Member

    Messages:
    2,783
    Likes Received:
    4
    Trophy Points:
    38
    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.
     
  2. imported_skull

    imported_skull Member

    Messages:
    252
    Likes Received:
    0
    Trophy Points:
    16
    Maybe Yellow is trying a trick on Estes. When they go bankrupt are they still going to pay rent?
     
  3. Overnite

    Overnite Active Member

    Messages:
    2,783
    Likes Received:
    4
    Trophy Points:
    38
    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?
     
  4. mattjm

    mattjm Junior Senior Member

    Messages:
    650
    Likes Received:
    1
    Trophy Points:
    18
    This is old news .
     
  5. teamster elvis

    teamster elvis Well-Known Member

    Messages:
    1,433
    Likes Received:
    233
    Trophy Points:
    63
    Read further dude. They have 2 more ten yr. options in the contract. Teamster Elvis out....
     
  6. Overnite

    Overnite Active Member

    Messages:
    2,783
    Likes Received:
    4
    Trophy Points:
    38
    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.
     
  7. wtfcares

    wtfcares Member

    Messages:
    165
    Likes Received:
    0
    Trophy Points:
    16
    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.
     
  8. Overnite

    Overnite Active Member

    Messages:
    2,783
    Likes Received:
    4
    Trophy Points:
    38
    I am not following you, you said he did that, he sold the terminals then leased them back?
     
  9. wtfcares

    wtfcares Member

    Messages:
    165
    Likes Received:
    0
    Trophy Points:
    16
    the old man that owned ovenite did buy other trucking companies properties and leased them back to themselves, and did it in cash!
     
  10. RevItUp

    RevItUp Member

    Messages:
    341
    Likes Received:
    0
    Trophy Points:
    16
    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.
     
  11. Overnite

    Overnite Active Member

    Messages:
    2,783
    Likes Received:
    4
    Trophy Points:
    38
    So he did the opposite of what YRC did, I think it is a smart move on Estes part.
     
  12. mattjm

    mattjm Junior Senior Member

    Messages:
    650
    Likes Received:
    1
    Trophy Points:
    18
    You U P S freigh guys should thank big brown for rescuing your company.
     
  13. Overnite

    Overnite Active Member

    Messages:
    2,783
    Likes Received:
    4
    Trophy Points:
    38
    Yes the creditors will only let yrc sell so much assets, anything over a certian amount had to go to pay them.
     
  14. laid off 90%

    laid off 90% Member

    Messages:
    632
    Likes Received:
    3
    Trophy Points:
    18
    and you should thank the big brown and grey guys for introducing you to the frieght industry and helping you compete with fed ex on a even playing field.
     
  15. Desert Eagle

    Desert Eagle Member

    Messages:
    207
    Likes Received:
    0
    Trophy Points:
    16

Share This Page