YRC Worldwide will execute a 1-for-300 reverse stock split Friday in an attempt to boost its stock value from about 3 cents per share to more than $1 per share.
The $4.3 billion trucking giant needs to boost and maintain the value of its stock above $1 per share to avoid delisting by the Nasdaq exchange. The stock split is an important step toward complying with Nasdaq listing rules and “enhances our position as a publicly held company,” said CEO James Welch.
A Nasdaq panel in October gave YRC Worldwide until Dec. 31 to execute a reverse stock split and keep its stock price above $1 per share for 10 straight days.
When the split is complete, the number of authorized common shares will drop to 33.3 million from 10 billion, and outstanding shares to 6.8 million from 2 billion. The number of shares in YRC stock rocketed when billions of new shares were issued as part of a $500 million debt restructuring completed in September.
The majority of that stock went to YRC’s lenders, who now own 72.5 percent of the company. YRC’s Teamster employees own 25 percent of the company’s stock. Shareholders approved the stock split at a meeting Wednesday, and also approved the election of seven members of YRC Worldwide’s board of directors.
Welch and a new board of directors joined the company as part of its restructuring, thelatest attempt to stave off bankruptcy and turn the ailing company around. YRC Worldwide reported a $120 million loss in the third quarter on $1.3 billion in revenue, including $96 million in charges and costs related to its restructuring.