The day after a three-day merger involving Australian earthmoving rental company/dealership Emeco and rental companies Orionstone and Andy’s Earthmovers was blocked because of the opposition of creditors, the deal came roaring back to life when merger backers won the support of a dissenting bondholder.
According to Australian news reports, Advent Private Capital, Houlihan Lokey and Moelis & Co. reached an agreement with Connecticut hedge fund Black Diamond Capital Management and obtained their backing with the addition of a number of small amendments.
The agreement must now work to gain the support of Emeco shareholders.
Orionstone says on its website that it is the largest heavy earthmoving provider in Australia with more than 300 machines. The company originally proposed a merger with Orionstone in April 2015, telling the Emeco board that the combined company would be one of the five largest equipment rental companies in the country. Andy’s Earthmovers also has a fleet of more than 300 earthmoving machines.
The merger had failed after five noteholders representing more than U.S. $125 million of debt opposed the plan earlier this week, representing nearly 35 percent of the value of the debt owed, which was more than the 25 percent required to smash the agreement. Black Diamond was the largest debt holder and was not satisfied with the original terms of the deal.
“Notwithstanding the outcome of yesterday’s creditors’ scheme meeting, it is very positive that all stakeholders, recognizing the strategic rationale, industrial logic and value creation opportunity of the transaction, have continued to work collaboratively and constructively to support the recapitalization of Emeco and the merger with Andy’s and Orionstone,” said Emeco managing director Ian Testrow. “We strongly believe in the strategic merits of the transaction and thank all stakeholders for their continued patience and support.”
