YRC Worldwide Inc. shocked its shareholders Monday by asking them to surrender 95 percent ownership of the embattled trucking company to its lenders as the &ldquo;final step&rdquo; in a recovery plan.</p><p>Investors drove down the Overland Park-based company&rsquo;s share price by 64 percent, more than on any day since at least 1980, according to Bloomberg News. The stock fell $2.33 and closed at $1.32 a share.</p><p>Analysts said shareholders may have little choice but to give up significant control as YRC works through debt problems and a cash squeeze amid the deep recession. </p><p>YRC, with 40,000 employees that include 1,000 non-union workers in the Kansas City area, has laid off thousands. It also has gained pay and benefit concessions from its remaining union employees, cut those for non-union workers, squeezed compromises out of its bankers and constructed an offer intended to settle matters with its unsecured lenders.</p><p>But Jason Seidl, an analyst at Dahlman Rose & Co. who has followed the company for years, said the proposed damage to shareholders announced Monday was a bigger train wreck than he had imagined.</p><p>&ldquo;I had no idea it would be this large,&rdquo; Seidl said. &ldquo;I didn&rsquo;t see the train wreck hitting the school bus full of kids and nuns.&rdquo;</p><p>YRC shareholders will be asked to approve the stock plan at a special shareholders meeting yet to be scheduled.</p><p>&ldquo;This is something we&rsquo;ve been talking about for most of the year in terms of the final step in our comprehensive plan,&rdquo; YRC chief executive Bill Zollars said Monday. &ldquo;We think this is going to create a situation where the company has a much stronger balance sheet and a lot more flexibility when it comes to liquidity.&rdquo;</p><p>Its balance sheet would be free of $536.8 million in debt owed to unsecured lenders. It also would open the taps on $106 million in new cash from its bankers. YRC wouldn&rsquo;t have to pay the interest on the unsecured debt and could put off payment of $25 million in other interest payments and fees.</p><p>It would give those unsecured lenders a 95 percent ownership stake in the company.</p><p>Analysts said shareholders likely had little choice. Take 5 percent of what&rsquo;s left or be left with nothing.</p><p>This is because YRC has essentially been trying to take most of the restructuring steps that a company would take in a bankruptcy reorganization, but without resorting to going to court. </p><p>A bankruptcy could drive away shippers and other clients at a devastating pace. It also would likely wipe out any value for the company&rsquo;s stock.</p><p>Monday&rsquo;s announcement from the company offered shareholders a presumably less costly alternative.</p><p>&ldquo;In the end, we view today&rsquo;s announcement as an out-of-court restructuring and a positive for (the company&rsquo;s) long-term viability, at the expense of current shareholders,&rdquo; analyst Lee Klaskow wrote in a report for Longbow Research.</p><p>In its announcement, YRC outlined a deal to swap new shares for the $536.8 million in notes its unsecured lenders hold. The deal would create more than 1 billion new shares on top of the 60 million current owners hold.</p><p>The company needs current shareholders&rsquo; approval because it doesn&rsquo;t have the authority to issue that many new shares. Once it does issue them, existing owners&rsquo; stake would be diluted to only 5 percent ownership.</p><p>YRC&rsquo;s plan also would provide stock options to its union employees.</p><p>Unsecured lenders typically receive stock when a company is able to reorganize in a bankruptcy proceeding.</p><p>Standard & Poor&rsquo;s Corp. cut its rating on YRC debt to CC from CCC, citing the offer to swap stock for the debt as &ldquo;a distressed-debt exchange and tantamount to a default.&rdquo; </p><p><hr class="infobox-hr-separator" /> <div class="infobox"> @ For the latest news on the financial crisis, go to <strong>KansasCity.com</strong> for the Dollars & Sense blog.</p><p></div>