Ahern Rentals files Chapter 11 bankruptcy to address revolver maturity

By Caroline Salls

Pittsburgh, Dec. 22 - Ahern Rentals, Inc. filed Chapter 11 bankruptcy Thursday in the U.S. Bankruptcy Court for the District of Nevada.

According to a company news release, Ahern made the filing because it was unable to extend the Aug. 21, 2011 maturity of its revolving credit facility.

The bank has continued to fund the company since the maturity date while negotiations for an out-of-court extension were ongoing, the release said.

Ahern said it was forced to file bankruptcy to address the maturity of the revolver, even though roughly 90% of the lenders would have consented to an extension.

In connection with the bankruptcy filing, the company has reached an agreement with existing lenders for debtor-in-possession financing with about $50 million of availability.

The DIP loan will be used to meet working capital needs during the reorganization process, Ahern said in the release.

Bank of America, NA is the administrative agent for the DIP financing, Wells Fargo Bank, NA is the collateral agent, and Merrill Lynch, Pierce Fenner & Smith Inc. is the lead arranger.

Interest will be Libor plus 400 basis points.

The DIP loan will mature the earliest of March 2013, the plan of reorganization effective date, 40 days after the bankruptcy filing date if a final order has not been entered and upon termination or acceleration of the commitments.

The company is seeking interim access to $20 million of the financing.

"We anticipate there being no interruption to our operations," chief executive officer Don Ahern said in the release.

"With our DIP facility, we will have sufficient liquidity to meet our commitments to our customers, vendors and employees.

"We have been experiencing a significant improvement in our business, with a substantial increase in our utilization levels and improved margins."

According to court documents, Ahern has between $500 million and $1 billion in both assets and debt. The company did not list any unsecured creditors with claims of $1 million or more.

The company's bankruptcy counsel is Gordon Silver, and its financial advisers are Oppenheimer & Co. and the Seaport Group.

Ahern Rentals is a Las Vegas-based equipment rental company. The Chapter 11 case number is 11-53860.

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