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Laidlaw undergoes financial restructuring

High fuel prices and a tight labor market were a couple of the factors that brought Laidlaw Inc. to the brink of financial disaster and a suspension from the New York Stock Exchange.

February 1, 2001
2 min to read


High fuel prices and a tight labor market were a couple of the factors that brought Laidlaw Inc. to the brink of financial disaster and a suspension from the New York Stock Exchange. “While the company’s core passenger services performed reasonably well in the face of difficult operating conditions … the company’s future was imperiled by the severe reduction in value of our other principal assents,” said Chairman Peter Widdrington and President John Grainger in a letter to shareholders. Facing a debt of more than $3 billion, Laidlaw planned on selling such assets as Safety-Kleen Corp. and healthcare businesses American Medical Response Inc. and EmCare Holdings Inc. That plan was never executed because Safety-Kleen filed for bankruptcy and the value of the other two companies declined. “These reductions resulted in write-downs which eliminated the book value of shareholders’ equity, put Laidlaw in violation of its debt covenants and left the company with an unmanageable debt load,” the letter read. Laidlaw is currently undergoing a restructuring program, the details of which can not be disclosed due to government regulations, Grainger said. The company has consolidated liquidity in excess of $250 million as a result of cash-on-hand and the availability of $100 million under a bridge facility with the Canadian Imperial Bank of Commerce and more than $50 million under a $125 million facility established for Greyhound Lines Inc. “This working capital infusion enables all Laidlaw’s operating companies to continue to execute their business plans, effectively isolated from the process of restructuring Laidlaw’s balance sheet,” said Widdrington and Grainger. For fiscal year 2000, the company reported a loss of $2.24 billion on sales of $2.93 billion, compared with a loss of $1.12 billion on sales of $2.25 billion the year before. While Laidlaw remedies its financial situation, there will not be any service interruptions for its affiliate companies, including Greyhound, said T.A.G. Watson, Laidlaw’s vice president of communications. “We have an objective of keeping the companies active and whole and keeping them supplied with cash for their needs,” he said. “We are progressing.” The NYSE suspended trading in Laidlaw’s common shares and certain exchangeable notes after it fell below the continued list criterion that requires companies to maintain a minimum share price of $1 during a 30-day trading period. Laidlaw last traded at less than 10 cents a share. The company can still be traded on the Toronto Stock Exchange and over the counter in the U.S.

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