22.06.2004

World's largest crane renter files for Chapter 11

Maxim Crane works, the company that grew out of Anthony Crane Rental following its purchase by Bain capital in 1998, has filed a pre-Negotiated chapter 11 of the US bankruptcy code providing protection from creditors while it restructures the capital base of the company.

Maxim has secured the agreement of a majority of its senior secured lenders to proceed with the restructuring which will see the company’s debt reduced from around $700 million to $450 million. In exchange the senior lenders will receive the majority
of the equity in the restructured company.

Maxim claim to have already received sufficient acceptances from its lenders to confirm its plan of reorganisation which it hopes to present to the court in mid summer, with a possible exit from chapter 11 during the fourth quarter. As part of the restructuring Maxim has agreed a $70 million “debtor in possession” line of credit to fund post chapter 11 filing operational expenses.

"The issues we face are financial, not operational," said Al Bove, Chief Executive Officer of Maxim Crane Works. "Although the Company's financial performance remains strong, the slowdown in the economy and the leveraged balance sheet that was created in the late 1990s have made it necessary for Maxim to strengthen its capital structure. Over the past three years, we have systematically adjusted our cost structure and have always generated positive cash flow. With the economy showing signs of recovery, now is the time to restructure our balance sheet."

Maxim will honour all employees costs and commitments and will see its day to day liquidity improve significantly. The company has struggled for three years under its massive debt burden brought about by the massive buying spree that saw Maxim acquire one crane company after another, building the original Anthony business into a 45 depot, 1700 crane, 1,000 aerial lift, 2,900 employee rental company. Famous crane renters who were snapped up by Maxim include: Dunn of Texas, Carlisle and Carolina crane among many others. The company name was changed from Anthony to Maxim in 2000.

The first challenge will be to secure the co-operation of the company’s suppliers who, unlike the senior lenders will not be participating in the debt for equity swap.

“All post-petition expenses will be paid, and we are confident our suppliers will continue to support us while we complete our restructuring" said Arthur Innamorato, President of Maxim Crane Works. "Looking ahead, we will continue to focus on effectively serving our existing customers, renewing contracts, and writing new business."

Looking to the future, "Once the restructuring plan is fully implemented, Maxim will have the strongest balance sheet in the industry," said Bove. "The accompanying reduction in debt service will significantly increase our ability to invest in the future through new equipment purchases and other growth initiatives, thus solidifying our position as the leading crane rental company in the U.S”

The Company filed its voluntary petitions in the United States Bankruptcy Court for the Western District of Pennsylvania in Pittsburgh