Ahern Rentals said this week that is has not made its scheduled $10.9 million interest payment due February 15 on its outstanding 9.25-percent second-priority senior secured notes due 2013. Ahern Rentals entered into a forbearance agreement with a majority of the revolving lenders under its credit agreement where the lenders will take no action as the company continues discussions with lenders to extend the maturity date of the revolving portion of the credit agreement.
The decision to not make the payment on the notes was done with the support of the holders of the term loan under Ahern’s credit agreement as well as the holders of a majority of the outstanding principal of the notes.
“Our decision today is an important first step in extending the maturity of our credit agreement,” said Don Ahern, CEO, in a statement. “We are engaged in discussions with the lenders under our credit agreement and the holders of a majority of the outstanding principal of our notes aimed at addressing the maturity of our credit agreement, and our decision to not make the payment was done with their support. The decision was part of our strategy to extend the maturity date of the revolving portion of our credit agreement, and with $33.5 million of availability on our revolver, we have sufficient liquidity to meet our commitments to our employees, customers and vendors.
“After a few very difficult years due to the recession in the United States, we have been experiencing a significant improvement in all areas of our business, particularly during the past six months, with a significant increase in our utilization levels and improved pricing. Ahern provides a valuable service for its customers and the discussions with our lenders and noteholders do not affect our commitment to continuing to offer customers highly reliable and quality equipment and service. It is business as usual and we anticipate no impact on our employees, customers and vendors.”
Also, effective immediately, Ahern will no longer file current, quarterly and annual reports with the Securities and Exchange Commission.
Based in Las Vegas, Ahern Rentals is No. 7 on the RER 100.