Ahern Rentals second amended reorganization plan effective on June 24

By Caroline Salls

Pittsburgh, June 24 - Ahern Rentals, Inc.'s seconded amended plan of reorganization took effect on June 24, according to a Monday filing with the U.S. Bankruptcy Court for the District of Nevada.

The plan was confirmed on June 6.

The amended plan changed the proposed treatment for holders of second-lien loan claims and added a $5 million contribution from equityholders and a $10 million payment to a second-lien noteholder group, previous court filings said.

Holders of second-lien loan claims and members of the noteholder group entered into a plan support agreement with Ahern in connection with the plan changes.

The noteholder group consists of Del Mar Master Fund Ltd., Feingold O'Keeffe Capital, LLC, Nomura Corporate Research & Asset Management, Inc., Och-Ziff Capital Management Group, Sphere Capital, LLC - Series B and Wazee Street Capital Management, LLC, which between them hold a total of at least 85% of the face amount of Ahern's second-lien loan notes.

Plan terms

Under the plan, holders of second-lien loan claims will receive a share of $268 million in cash, as well as contingent value rights, which would entitle holders to a share of $25 million to be paid in connection with a change of control.

Holders of current equity interests will make a $5 million new value contribution under the amended plan to retain 100% of the reorganized company's new equity.

Also under the amended plan, the noteholder group will receive $10 million in cash in full satisfaction of its claims for reimbursement of out-of-pocket fees and costs.

Financing

As previously reported, Ahern received court approval to enter into commitment, fee and engagement letters with Jefferies Finance LLC in connection with up to a $415 million senior secured bridge loan facility.

The bridge loan would be used to satisfy the company's term loan and second-priority senior secured notes if a notes offering was not completed.

Last month, an informed source said Ahern priced an upsized $420 million issue of five-year second-priority senior secured notes at par to yield 9½%. Proceeds are to be used to refinance debt.

The company also received court approval to enter into commitment and syndication letters in connection with an up to $325 million senior secured asset-based revolving credit facility. Revolver proceeds will be used to pay off Ahern's debtor-in-possession financing.

Ahern Rentals, a Las Vegas-based equipment rental company, filed for bankruptcy on Dec. 22, 2011 under Chapter 11 case number 11-53860.

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