Neff enters 'prearranged' Chapter 11 to restructure
18 May 2010
One of the largest US rental companies, Neff Rental, has entered Chapter 11 bankruptcy protection in the US. Neff, which continues to trade as normal, said the filing was prearranged and would allow it to restructure its debts.
Neff said it has obtained full commitments from its existing lenders to provide US$175 million in finance as well as new equity investment of $119 million from current backers Wayzata Investment Partners and Apollo Capital Management.
The company aims to use the restructuring to eliminate $400 million of debt and deleverage its balance sheet.
"The filing of the company's Chapter 11 Plan culminates the process that the company undertook several months ago to reduce debt and puts the company on sound long term financial footing," said Neff's chief executive officer Graham Hood. "The restructuring will provide liquidity for ongoing business needs and allow Neff to make significant investments in its rental equipment fleet."
Neff said the management team and employees would continue to operate the business as normal throughout the restructuring. "It is business as usual while we move forward to address our capital structure", said Mr Hood, "During this process the Company will continue to deliver high quality equipment and services to its customers as normal".
The company said in a statement that cash flows from operations and the $175 million in committed financing will provide stability and "ample liquidity to fund daily operations without interruption, including payments to vendors and to meet all customer and employee obligations."
Neff is one of the top 10 rental companies in the US and was ranked 56 in IRN's IRM-100 listing, with revenues in 2008 of $225 million. Based in Miami, it operates around 60 rental locations in the southeast of the US.
More details of the restructuring plan can be found at the following website: www.kccllc.net/neff