Report: Trucking firm to ask for $1 billion in bailout cash

ByABC News
May 16, 2009, 3:21 PM

NEW YORK -- The nation's largest publicly traded trucking company will ask for $1 billion in aid from the federal bailout fund, as creditors come knocking and business continues to sink, media reports said Friday.

If approved, YRC would become the first trucking company to get help from the bailout fund, officially known as the Troubled Asset Relief Program, or TARP. But analysts say the chance of YRC getting any bailout money is slim.

The company also announced Friday that is has reached an agreement with its banking group that will allow it to keep it within the terms of its debt. Creditors have once before given a lifeline to YRC, allowing it to pay back debt slowly through asset sales and other means.

YRC, which runs trucks under the names including Yellow Transportation and Roadway, wants to sell more of its real estate and use some of the proceeds for debt collateral.

A spokesman for the Treasury Department declined to comment on whether an official application for aid had been filed as of midday Friday. The request was reported by The Wall Street Journal.

The $700 billion TARP bailout fund, approved by Congress last year, was originally intended to help banks navigate through the credit crisis, but it has also been used to make loans to auto companies and insurer American International Group.

Treasury Secretary Timothy Geithner told a congressional oversight panel recently that the TARP fund Congress approved last October now has $110 billion that has not been committed. But several companies are trying to repay TARP funds, which would boost the pot for additional Treasury financial assistance.

Overland Park, Kansas-based YRC said in a filing with the Securities and Exchange Commission late Monday there was "substantial risk" that its cost cuts and shipment increases would not have been made in time to meet its minimum requirement for credit facilities in the second quarter, which could have led to a possible default. But the agreement reached Friday will give the company a bit of much needed financial leeway.