At its annual stockholders meeting, Essex Rental Corp. provided an update on the status of its wholly-owned subsidiaries, Essex Crane Rental Corp. ("Essex Crane") and Coast Crane Company ("Coast Crane").
Update on Essex Crane Rental Corp.
On September 9, 2016, in connection with foreclosure proceedings under Article 9 of the Illinois Uniform Commercial Code effected by Wells Fargo Capital Finance LLC, as Administrative Agent (the "ECRC Agent") under Essex Crane's Fourth Amended and Restated Credit Agreement (the "Essex Crane Revolving Credit Facility"), substantially all of the productive rental equipment assets and three real property locations owned by Essex Crane were sold for $75 million, subject to adjustment, to Maxim Crane Works, L.P. In addition, in connection with such sale, Essex Crane entered into a further forbearance agreement with the ECRC Agent pursuant to which Essex Crane is expected to sell its remaining assets and wind down its business, which effectively ceased as of the date of the asset sale, in cooperation with the ECRC Agent. The net proceeds of the asset sale described above and of any asset sales during the wind down period will be used to fund Essex Crane payables, including employee payroll amounts and similar obligations, and to reduce the then outstanding obligations under the Essex Crane Revolving Credit Facility.
Update on Coast Crane Company
On September 9, 2016, Coast Crane entered into a Third Amendment to its Second Amended and Restated Credit Agreement with Wells Fargo Bank, National Association as Agent for the lenders thereunder (the "Coast Crane Credit Facility"). The Third Amendment provides for a waiver of the previously disclosed defaults resulting from Coast Crane's breach of certain delivery and financial reporting requirements contained within the Coast Crane Credit Facility, and a cessation of default interest as of September 1, 2016. The Third Amendment also provides for the issuance by Coast Crane of a twelve-month, non-interest bearing $2 million unsecured subordinated promissory note to Essex Crane in settlement of intercompany transfers, and provides for the ability of Coast Crane, at its option, to purchase certain cranes from ECRC for a purchase price not to exceed $1 million.
Nick Matthews, President and CEO of Essex stated, “The UCC sale and subsequent clarity it provided at Essex Crane, along with the waiver of the default under the Coast Crane Credit Facility were important steps toward moving forward. We appreciate the patience of our shareholders, customers and employees and are eager to focus all of our efforts on creating shareholder value.”
Essex, through its subsidiaries, is one of North America's largest providers of rental and distribution for mobile cranes (including crawler cranes, truck cranes and rough terrain cranes), self-erecting cranes, stationary tower cranes, elevators and hoists, and other lifting equipment used in a wide array of construction projects.