A U.S. Bankruptcy Court judge has allowed Ahern Rentals to begin using a $350 million bankruptcy loan, primarily to pay off debt, Dow Jones News Services has reported. Judge Bruce Beesley of U.S. Bankruptcy Court in Reno, Nev., approved Ahern Rentals’ request to borrow $20 million on the loan before a final hearing is held early in 2012. The loan is coming from a group of existing lenders.
Ahern Rentals filed for Chapter 11 bankruptcy protection last week to restructure its debt. The company said if it receives final approval of the $350 million loan, it will use about $250 million to pay off a revolving loan.
Ahern Rentals had received support from most of its creditors for a restructuring outside the court system, which would have given it a one-year extension of the maturity date of the $350 million loan from most of its creditors. However, three revolving lenders refused to sign on to the deal, and when the loan matured in December, Ahern was forced to file for bankruptcy. The company has more than $600 million in total debt, according to court documents.
Ahern Rentals suffered from the construction downturn particularly in the Las Vegas area, but has had an increase in revenue in 2011. The Las Vegas-based equipment rental company has 74 branches in 22 states and is No. 7 on the RER 100.