15.01.2010

Ahern raises further funds

Ahern the Las Vegas based rental company has agreed an amendment to its principal revolving loan facility and raised a further $95 million from Liberty Harbor a real estate investment company.

Ahern’s current $350 million revolving credit line matures on August 21, 2011. The new loan has an interest rate of 16 percent and matures in December 2012.

The net proceeds from the new term loan is $47 million which is being used to repay outstanding loans under the revolving credit line. This together with a previous agreement to amend its covenants, provides the company with additional liquidity to continue with its strategies through the current downturn.

Don Ahern, the company’s chief executive said: “We are very appreciative of the
support of our bank group, Liberty Harbor and our existing bondholders in helping us achieve this important financing. We will continue to execute on our business strategy so that Ahern Rentals can successfully navigate the severe industry downturn we are currently encountering and emerge on the other side with a stronger company and an improved geographic footprint that will allow us to resume our history of growth.”

Vertikal Comment

While the financial transactions give the company room to breath and provides some relief on its credit lines, it does come at a cost, both in terms of interest payments and shareholders equity.

If construction starts to pick up during the year end and the rental business starts to rebound, Ahern is well placed to benefit given that it has continued to expand its market coverage, operates a relatively young fleet and has a strong team.