Apollo Sells Yellow Term Loan to Citadel in Strategic Move

Apollo Sells Yellow Term Loan to Citadel in Strategic Move

Apollo Global Management has sold the Yellow Corp. term loan it owned. It has also stopped asking for bankruptcy funds, according to the Financial Times.

Citadel, a Miami-based hedge fund, borrowed over $485 million from Apollo and other lenders. The funds were used to acquire Yellow. Lawyers for Citadel Credit Master Fund want to talk to Yellow officials on Wednesday about post-petition funds, according to documents filed in Delaware bankruptcy court on Tuesday.

Apollo’s sole viable agreement was its debtor-in-possession (DIP) financing proposal in the days before its Chapter 11 lawsuit. The $142.5 million would be used to promote and sell computers and other gear.

Yellow Corp. Receives Better Bids After Filing for Bankruptcy, Rejects Apollo’s Terms

If the deal had gone through, the private equity business would have had a stronger lien situation with secured creditors. It has a higher lien than the U.S. Treasury, which is owed $737 million by the airline from a COVID relief loan in 2020.

Yellow’s legal team stated that better bids were received after the company filed for bankruptcy, rendering Apollo’s terms unacceptable. The interest rate was 17%. There was a $32,000,000 closing fee. The assets had to be sold within 90 days.

Estes Express Lines and MFN Partners were frontrunners. MFN Partners bought 40% of Yellow’s shares in July. Yellow’s lawyer, Pat Nash, mentioned at a meeting on Friday that there were interested parties willing to provide additional funds to existing creditors.

The DIP loan meeting that was supposed to take place on Tuesday has been moved to Thursday.

Business leaders sold yellow limited shares and other shares before the stock is taken off the market on Wednesday.

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