Ahern Rentals reports it 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.
The company 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.
Reports say 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.
Don Ahern, CEO, is quoted as saying this decision is an important first step in extending the maturity of the company's credit agreement. It's part of a strategy to extend the maturity date of the revolving portion of the company's credit agreement - and with $33.5 million of availability on its revolver - Ahern has sufficient liquidity to meet commitments to employees, customers and vendors.
Ahern notes that the company is experiencing significant improvement in all areas of its business, particularly in utilization levels and pricing.
Also, effective immediately, Ahern will no longer file current, quarterly and annual reports with the Securities and Exchange Commission.