Avenue Capital Boosts Stake in YRC Worldwide, Inc. (YRCW) via Preferred Stock Conversion

Avenue Capital, managed by Marc Lasry, has recently upped its stake in YRC Worldwide, Inc. (NASDAQ:YRCW). The fund currently holds more than 8.2 million shares of the company, the stake amassing 25.5% of the common stock, up from some 5.87 million shares held previously. According to a filing with the SEC, Avenue increased its exposure to the company after converting approximately 583,300 units of Class A Convertible Preferred Stock into over 2.33 million common shares.

AVENUE CAPITAL

Moreover, in its latest 13F, Avenue Capital reported holding around $31 million worth of YRC Worldwide, Inc. (NASDAQ:YRCW)’s notes. Aside from Avenue Capital, a significant shareholder of YRC Worldwide is Christopher Pucillo’s Solus Alternative Asset Management LP, which last month boosted its stake to some 2.55 million shares. William C. Martin‘s Raging Capital Management also owns a big stake, which contains 647,100 shares, according to its latest 13F.

A couple of weeks ago, YRC Worldwide, Inc. (NASDAQ:YRCW) reported its financial results for 2013, which showed a slight improvement in operating revenue, which edged up by 0.3% on the year to $4.87 billion. The company also posted a net loss of $83.6 million, narrowing it from a loss of $136.5 million a year ago. The stock of YRC gained almost 30% since the beginning of the year, and trades at a forward P/E of around 13.xx.

In January, YRC Worldwide reported about completing the financing of $700 million term loan and $450 million Asset-Based Loan facility. The proceeds from the new loans will be used for refinancing of the existing debt of the company.

New York-based hedge fund Avenue Capital, in its latest 13F filing revealed an equity portfolio worth $over $1.3 billion. The multi strategy hedge fund has a diversified equity portfolio invested primarily in Services and Financial sectors. The largest position in the equity portfolio is a $195.37 million stake in Houghton Mifflin Harcourt Co. (NASDAQ:HMHC), which amasses about 11.52 million shares; followed by Dynegy Inc. (NYSE:DYN), and Scorpio Bulkers Inc (NYSE:SALT), in which the fund owns 5.08 million and 10.33 million shares respectively.

Disclosure: none

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