Creditors led by Apollo Global Management Inc. are nearing a deal to provide Yellow Corp. with fresh cash during a coming bankruptcy, according to people with knowledge of the matter.

The investing giant is finalizing a deal to lead a debtor-in-possession, or DIP, financing for the imperiled trucking company, said the people, who asked not to be identified because the matter is private. Apollo is well-positioned to provide the financing because it owns most of one of Yellow’s term loans, the people said. Talks aren’t final and plans may change, they added.

A representative for Apollo declined to comment. Representatives for Yellow didn’t immediately respond to requests for comment.

The less-than-truckload carrier, which accepts shipments that don’t fill a whole trailer, has been teetering in recent weeks and told workers it was shutting down, according to the labor union that represents Yellow’s drivers. The company has more than $1 billion of debt maturing next year that it has struggled to refinance. Apollo was the lead lender on the company’s $600 million term loan in 2019, when it was known as YRC Worldwide Inc.

Much of Yellow’s current debt predicament stems from a now-controversial rescue loan it took on during the Covid-19 pandemic. The US government lent the company some $700 million in 2020, making up 95% of what was dispersed under a Cares Act program to offset losses for businesses critical to national security. The company owes about half its total debt load to the US Treasury, according to company filings.

Yellow has faced years of financial stress. The company staved off a bankruptcy filing in 2009 after bondholders agreed to swap debt for equity, only to have to restructure again in 2011.

Author: Reshmi Basu, Rachel Butt and Jeremy Hill