Court approves Ahern Rentals' DIP financing
By Lindsey Anderson31 January 2012
Nevada-based Ahern Rentals, Inc. announced that on Friday, January 27, the U.S Bankruptcy Court for the District of Nevada in Reno, NV approved the final Debtor-in-Possession (DIP) financing with approximately $66 million of availability.
"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," said Don Ahern, chief executive officer.
"We have been experiencing a significant improvement in our business, with a substantial increase in our utilization 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. As to our customers, vendors and employees it is business as usual."
In addition the court approved a series of other motions to ensure that the company will not have any interruption in maintaining and honoring its commitments to its current customers, vendors and employees during the reorganization process.
Included in these motions was a 503 (b) (9) motion which allows (but does not require) Ahern to pay its vendors for goods received within 20 days of filing provided that the vendor continues to provide goods on the same terms to the company.
Ahern Rentals filed for Chapter 11 on Dec. 22, 2011 because it was unable to extend the maturity of its Revolving Credit Facility, which had a maturity date of Aug. 21, 2011.
While Ahern's financial performance continues to improve, it was forced to seek bankruptcy protection to address the maturity of its Revolving Credit Facility, despite the fact that approximately 90 percent of the company's lenders would have consented to an extension.
The company intends to continue its business operations throughout the administration of the Chapter 11 and to honor its existing customer, vendor and employee commitments without interruption.
It will use the DIP financing to meet its working capital needs during the reorganization process.