28.05.2013

Ahern looks set to win

Don Ahern looks likely to retain full ownership of Ahern Rentals after reportedly reaching an agreement with the company’s bondholders. Thanks to an improved repayment offer, made possible by its recent $415 million of exit funding.

Assuming that all as it seems this should make next week’s court hearing a great deal simpler, avoiding the need for the judge to choose between two competing plans of reorganisation.

Vetikal Comment

This has been a long and turbulent Chapter 11 process, with Don Ahern playing every card at his disposal and never ever giving up. As a result he has almost certainly managed to retain control of the family company.

It will though have come at a cost. The company is likely to emerge from Chapter 11 with more debt than when it went in.

The debt will though be different and Ahern will take solace in the fact that he will be free of the note holders that he felt - rightly or wrongly - were simply trying to take control of the business. The economic climate is also in a very different place than when he went in.

He will be gambling on a few years of strong growth sufficent to pay down debt and reduce the exceptionally high leverage he will exit with.