The National Equipment Services Inc. (NES Rentals), one of the largest equipment rental companies in the U.S., emerged from Chapter 11 bankruptcy protection earlier this month.
NES grew by acquiring 42 companies between 1996 and 2001. At the time of the bankruptcy protection filing on June 27, 2003, the company was operating under an $800 million debt burden. The confluence of an economic downturn with maturing bank and bond debt led to the need for reorganization. NES retained Carl Marks Consulting Group, one of the country's leading corporate revitalization firms, to work with NES management to develop and implement its turnaround and restructuring strategy.
NES management and Carl Marks Consulting Group undertook a number of actions during the reorganization, such as analyzing the company's core business, improving management of NES' fleet of 45,000 pieces of equipment and implementing significant cost reductions including the consolidation of back office operations. Total NES revenues for 2003 are expected to exceed $550 million.
The reorganization plan, approved by the bankruptcy court on Jan. 23, 2004, includes a three-year, $496 million exit loan facility from a bank group led by Wachovia. A portion of the exit loan will be used for capital expenditures to revitalize the NES rental fleet. NES eliminated approximately $275 million in debt from its balance sheet as bondholders agreed to convert approximately 97.5% equity ownership in the company.
