In mid-July, Essex Crane Rental Corp. lenders announced that they would offer all of the company’s assets for sale in a public auction. Originally scheduled for July 28th, the auction has been rescheduled for Aug. 12th. Nick Matthews, Essex president and CEO, said the company has been operating under forbearance agreements and working with its lenders to identify a way to best maximize value for all its stakeholders.
“Throughout this process, we have explored several options including the sale of Essex Crane as a going concern; selling equipment assets in auctions and by other means; and restructuring around a smaller level of debt,” Matthews said in a press release. “At this point, Essex Crane’s lenders have chosen to offer Essex Crane’s assets in a public auction in an effort to increase the value received in exchange for those assets,” he added.
In early April, Coast Crane, sister subsidiary to the Buffalo Grove, Ill.-based company, received a notice of default from Wells Fargo Capital Finance. The default resulted from Coast Crane being late to deliver financial reports required by its creditors and from its failure to include in the report a valuation allowance related to net operating losses being carried forward in prior-year financial statements.
Despite the default, Coast Crane has continued to perform better than the standards set in its credit facility. The company has been and expects that it will be able to continue to use the Coast Crane Revolving Credit Facility to fund operations.
The announcement stated that Coast Crane’s parent company, Essex Rental, has been working with Stifel, Nicolaus & Co. Inc. to evaluate strategic alternatives related to the sale or refinancing of Coast Crane. After reviewing market feedback assembled by Stifel, the board of directors elected not to sell Coast at this time. Essex Rental is focusing on refinancing the Coast Crane Revolving Credit Facility, as well as continuing to explore future opportunities for Coast Crane.
Essex Rental reported that throughout the first half of 2016, the transportation end market continued to display year over year increases in activity driven by bridge work in the Midwest and Southeast regions. General building remains strong, resulting in increased tower-crane utilization and average rental rates year over year. However, the retail and rental equipment sales market remains soft and the challenges in the energy sector have continued.
Petrochemical activity in the Pacific Northwest decreased year over year and impacted heavy RT cranes. While overall RT utilization has been consistent year over year, the mix has shifted toward the lighter lifting capacities. The Gulf Coast has shown a decline in industrial/marine and petrochemical activity, which has impacted hydraulic crawler-crane utilization as compared to the strong first half of 2015.
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