Ahern files Chapter 11
Las Vegas based rental company Ahern Rentals has filed a voluntary chapter 11 petition in order to restructure over $500 million of debt.
The company which specialises in aerial lift and telehandler rental from 74 locations across 22 states, has filed the voluntary petition for Chapter 11 reorganisation in the United States Bankruptcy Court for the District of Nevada in Reno.
The company has also reached an agreement with existing lenders for Debtor-in-Possession (DIP) financing, with approximately $50 million of availability, pending bankruptcy court approval.
Ahern said that it was obliged to file for Chapter 11 because it had failed to extend the maturity of its revolving credit facility, which had a maturity date of August 21, 2011. Since the maturity date passed, its bank has continued to fund the company while negotiations for an extension to the credit line continued.
The company defaulted on an interest payment in February which then triggered the neogiations. Click here to see Ahern defaults
It says that while 90 percent of its lenders were ready to consent to an extension, it had no option in the end but to seek bankruptcy protection in order to address the extension.
The company says that it intends to continue its business operations as normal throughout the administration/Chapter 11 process and will honour all of its existing customer, vendor and employee commitments without interruption.
The company plans to use its DIP financing to meet working capital needs during the reorganisation process, subject to bankruptcy court approval.
Chief executive Don Ahern said: "We anticipate there being no interruption to our operations. With our DIP Facility, we will have sufficient liquidity to meet our commitments to our customers, vendors and employees. We have been experiencing a significant improvement in our business, with a substantial increase in our utilisation levels and improved margins.”
“The Company provides a valuable service for its customers, and we do not expect the bankruptcy filing to affect our ability to continue to offer customers highly reliable and quality equipment and service. It is business as usual, and we anticipate no impact to our customers, vendors and employees."