Massive debts drive rental giant Maxim to Chapter 11

News Story
- 1 Jul 2004 ( #164 ) - PITTSBURGH, PA, United States
1 min read
Maxim Crane Works, the USA's largest crane and telescopic forklift rental company, has filed for creditor protection under Chapter 11 of the US Bankruptcy Code with debts of USD700 million.
Maxim announced on June 14 that it had reached an agreement with the majority of its lenders on a financial restructuring of the company.
Under that agreement, the lenders would assume the majority of the company's equity and reduce the outstanding debt by about USD450 million.
The largest of the 17 creditors involved in the reorganisation is US Bank National Association of Hartford, CT, which is owed USD48 million.
Maxim insisted the move into Chapter 11 protection did not mean the company would cease operations, and said it would emerge from Chapter 11 in the fourth quarter of this year.
"The issues we face are financial, not operational," CEO Al Bove said.
"Although the company's financial performance remains strong, the slow-down in the economy ... (has) made it necessary for Maxim to strengthen its capital structure.
"Over the past three years, we have systematically adjusted our cost structure and have always generated positive cash flows. With the economy showing signs of recovery, now is the time to restructure our balance sheet.
"Once the restructuring plan is fully implemented, Maxim will have the strongest balance sheet in the industry," he said.
Maxim specialises in the rental and sale of rough-terrain telescopic forklifts, cranes, aerial work platforms, boom trucks and other ancillary equipment.
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