YRC Worldwide Inc. will contribute real estate to the $15.6 billion Teamsters Central States, Southeast and Southwest Areas Pension Fund as collateral to defer an estimated $83 million in cash contributions, according to an agreement announced Thursday.
The trucking company, based in Overland Park, Kan., also is negotiating with its other Teamsters multiemployer defined benefit pension funds concerning $50 million in cash contributions the company already deferred “to join as participants in this same agreement,” the statement said.
YRC and the Rosemont, Ill.-based Central States fund reached the agreement that calls for the company to pay the deferred contribution over three years, beginning in January, the statement said. The contribution was for the second quarter, ending June 30.
The real estate is owned by the company.
Central States is the largest of the Teamsters multiemployer funds to which YRC contributes and represents 58% of the company’s monthly pension funding obligations, the statement said.
The “announcement marks important milestones, which are part of our overall strategy to provide us with greater financial flexibility during the economic recession, giving us additional liquidity and the ability to use our cash to support the business,” Bill Zollars, chairman, president and CEO of YRC Worldwide, said in the statement.
Suzanne Dawson of Linden Alschuler & Kaplan, YRC’s external public relations firm, couldn’t be reached for comment concerning how YRC will pay future contributions or the type of real estate contributed as collateral.
