Apollo Global has withdrawn from Yellow’s bankruptcy financing plan.
Apollo Global has withdrawn from Yellow's bankruptcy financing plan.
Apollo Global Management Sells off $500 Million Loan to Yellow Corp
/cloudfront-us-east-2.images.arcpublishing.com/reuters/52WYJKQWF5NWVKVYHEPG6NMZFM.jpg)
In a surprising move, Apollo Global Management (APO.N) has decided to sell off a $500 million term loan given to Yellow Corp (YELL.O) and has also dropped its plans to extend financing to fund the freight group’s bankruptcy. This news was reported by the Financial Times on Tuesday.
The term loan has been bought by a fund owned by Citadel, according to the FT report. This sudden development has caused Yellow shares to close down by 31%, reflecting the market’s response to the news.
Neither Yellow, Apollo, nor Citadel have responded immediately to ANBLE’s requests for comment.
Last Wednesday, an attorney representing Yellow stated that the company would not be seeking court approval to borrow $142.5 million from Apollo as originally planned. Instead, Yellow is now seeking more time to explore alternate loan offers.
One of the key factors contributing to Yellow’s decision is its upcoming debt payments. The company has a substantial $1.3 billion debt to be paid in 2024. This includes a $567.4 million term loan due in June and a $729.4 million U.S. Treasury loan due in September.
- A startup developing air carbon extraction technology was sold to a...
- Increasing number of Americans tapping into 401(k)s for financial s...
- Mahindra, an Indian company, plans to increase tractor exports by 1...
Details surrounding the sale of the loan to Citadel and the reasons behind Apollo’s decision to drop financing for Yellow’s bankruptcy are yet to be disclosed. It remains to be seen how this development will impact Yellow’s financial situation and its ability to navigate through the challenging times ahead.
The Background: Apollo and Yellow Corp’s Loan Agreement
Apollo Global Management had previously entered into a loan agreement with Yellow Corp, offering a term loan of $500 million. This loan was meant to aid the freight group with its bankruptcy proceedings.
However, in a surprising twist of events, Apollo has decided to sell off the term loan to a fund owned by Citadel. The reasons behind Apollo’s decision are as yet unknown. It is an unusual move, especially considering Apollo’s initial support for Yellow Corp’s financing needs during its bankruptcy filing.
Yellow Corp, on the other hand, is now looking at alternative loan offers. The company’s attorney shared last week that they will not be seeking court approval for the originally planned $142.5 million loan from Apollo. This decision suggests that Yellow is exploring other options to address its financial requirements.
The Implications: Yellow Corp’s Debt Burden
Yellow Corp is facing a significant debt burden, with $1.3 billion in debt payments due in 2024. This includes a $567.4 million term loan due in June and a $729.4 million U.S. Treasury loan due in September.
With Apollo’s withdrawal from extended financing for Yellow’s bankruptcy, the company faces uncertain prospects. Not being able to secure the loan from Apollo impacts Yellow’s ability to manage its financial situation effectively.
The sale of the term loan to Citadel raises questions about the rationale behind Apollo’s decision. Further details regarding the terms of this sale are still undisclosed, leaving room for conjecture and speculation about the motivations behind the decision.
Final Thoughts
The sale of Apollo Global Management’s $500 million loan to Yellow Corp and their decision to drop financing for Yellow’s bankruptcy have sent shockwaves through the market. This unexpected turn of events has caused Yellow’s shares to plummet by 31%.
While Yellow Corp explores alternative loan offers, the company is also burdened with a substantial amount of debt due in 2024. Apollo’s withdrawal from the loan agreement adds another layer of complexity to Yellow’s financial situation.
The coming days and weeks will likely bring more insights into Apollo’s reasoning for selling off the loan and halting its financing plans. Investors, as well as Yellow Corp’s stakeholders, will be closely monitoring the developments and analyzing the potential impact on the company’s future.
As the story unfolds, it will be interesting to see how Yellow Corp navigates through these challenging times and if the company manages to secure the necessary financing to address its debt burden effectively.
/cloudfront-us-east-2.images.arcpublishing.com/reuters/5MJTPB6Y6RM5VABWXQGMXIYZ4M.jpg)
/cloudfront-us-east-2.images.arcpublishing.com/reuters/2MP3DKUB6BOGTFATEZ47FL3WPI.jpg)
