Yellow gets final court approval of DIP financing, bid procedures

By Sarah Lizee

Olympia, Wash., Sept. 15 – Yellow Corp. received final approval from the U.S. Bankruptcy Court for the District of Delaware of up to $212.5 million new money debtor-in-possession financing, according to an order filed Friday.

As previously reported, the company had received proposals for DIP financing from its prepetition term B-2 lenders, its 40% equity owner MFN Partners and rival Estes Express Lines, as well as others that were not named.

The deal Yellow decided to go with is being provided by MFN and investment firm Citadel LLC.

Citadel recently bought $500 million of Apollo’s term loans, making it the company’s newest B-2 lender.

Citadel has agreed to provide $100 million of the new money, pari passu with the existing term B-2 debt, and with no rollup of pre-petition debt. MFN will provide the remaining $42.5 million of new money on a junior basis, coming in second on the B-2 priority collateral, but junior to the rest of the secured collateral.

Citadel and MFN will each receive 4% in DIP fees on the money they are providing. MFN’s portion will bear interest at 15% per annum, and Citadel’s will earn interest at the same rate as under the prepetition B-2 term loan.

MFN has also agreed to provide an additional $70 million delayed-draw on a completely junior basis, if needed.

The facility is set to mature in February.

Bid procedures

Yellow has also received court approval of the bid procedures for its assets, according to a separate order filed Friday.

The procedures set out two timelines – one for rolling stock and the other for real estate and all other assets.

For rolling stock, the bid deadline is 5 p.m. ET on Oct. 13, an auction is set for Oct. 18, and a sale hearing will take place on Oct. 27.

For real estate and other assets, the bid deadline is 5 p.m. ET on Nov. 9, an auction is set for Nov. 28, and a sale hearing will take place on Dec. 12.

As previously reported, the company recently received a new $1.53 billion stalking horse bid for its terminals from Estes. Estes had originally put in a $1.2 billion stalking horse bid for the terminals.

Soon after that, Old Dominion Freight Line, Inc. submitted an offer to purchase the assets for $1.5 billion.

Estes then offered to purchase the assets for $1.53 billion. The company said this bid is an improvement from Old Dominion’s, as it offers more money for the assets and less fees in terms of bid protections, which total $9.1 million under Estes’ new offer.

The deal is subject to higher or better offers through the court-approved bid procedures.

Yellow is a provider of regional, national and international shipping services based in Nashville. The company filed bankruptcy on Aug. 6 under Chapter 11 case number 23-11069.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.