Ahern Rentals Creditors File Revised Reorganization Plan

March 8, 2013

Second-lien noteholders of Ahern Rentals have filed a revised plan of reorganization for the company. The investor group holding or managing almost $211 million, or 90 percent of Ahern’s 9.25-percent senior secured notes due 2013, filed the amended POR and accompanying disclosure March 5 with the U.S. Bankruptcy Court in Las Vegas, according to www.debtwire.com.

The investor group includes Del Mar Master Fund Ltd.; Feingold O’Keefe Capital; Nomura Corporate Research & Asset Management; Och-Ziff Capital Management; Sphere Capital and Wazee Street Capital Management.

The second-lien plan would reduce Ahern’s outstanding debt by at least $267.7 million by converting all second-lien notes into new equity interests. An additional $15 million in new equity would be added through a backstopped rights offering. Under the plan, all claims except for those from second-lien notes would either be unimpaired or fully paid in cash, the noteholders said.

Second-lien claimants would recover an estimated 75 to 80 cents on the dollar through a distribution of new equity and subscription rights to acquire additional new equity through a backstopped rights offering.

The company’s two shareholders, Don Ahern, who owns 97 percent and John Paul Ahern who owns 3 percent, would receive new warrants in satisfaction of their existing equity interests, according to the plan. Don Ahern would continue as president and CEO while Sphere Capital would have the right to appoint four of seven directors of the new board.

The plan estimates Ahern will have a reorganized value of between $515.4 million and $628.2 million, with a midpoint value of $572.3 million.

The disclosure statement says that proponents of the plan have no intent to combine the reorganized company with Maxim Crane or Nesco, which are partially owned by Platinum Equity, which also owns a portion of Ahern Rental debt.

A hearing on the POR as well as the plan presented by Ahern Rentals was held March 8 in U.S. Bankruptcy Court.