Ahern and bondholders reach agreement
By Lindsey Anderson30 May 2013
Nearly a year and half after filing Chapter 11, Nevada-based Ahern Rentals is poised to exit bankruptcy after reaching an agreement with its bondholders.
According to various media reports and court papers filed May 24, Don Ahern will retain ownership of the rental company and bondholders will receive a full, immediate payment of $268 million.
Bondholders will receive another $10 million to cover legal fees and also have the chance to receive an additional $25 million if Ahern were to change ownership within two years of exiting Chapter 11. The final hearing for the reorganisation plan is set for June 6.
Ahern's prior plan would have provided the bondholders new notes and $160 million in cash, a proposal the bondholders balked at and countered with a plan that would have given them equity in Ahern Rentals.
The Ahern family has owned the business for more than six decades. According to court papers, Ahern will have to put $5 million of his own money into the company in order to stay at the helm.
Ahern obtained $415 million in exit financing through Jeffries Finance LLC, of which Ahern plans to use $380 million to pay the debt it owed to pre-bankruptcy lenders and bondholders.
Judge Bruce Beesley also gave Ahern Rentals permission to sign an additional $325 million in exit-financing through a group of lenders which includes Bank of America.
The credit will allow Ahern to pay off $224.6 million it owes from taking a loan out to fund its Chapter 11 case.
Ahern Rentals, based in Las Vegas, is the largest independent rental company in North America, with revenues in 2012 of $353.4 million. It entered Chapter 11 bankruptcy protection in December 2011.