RENO, Nev. -- Amerco, parent company of U-Haul, said it is now in discussions with bondholders and lenders to reorganize the company's balance sheet. Amerco also announced it will miss the Dec. 1 dividend payment due to holders of its Series A 8.5% preferred shares.
Moreover, the company disclosed this week that it's facing $76.1 million in added tax exposure because the IRS wants to adjust previous tax returns. In its third-quarter report filed with the Securities and Exchange Commission, Amerco said it will contest the IRS's proposed adjustments. They are mostly tied to rejected deductions for litigation costs.
Amerco reported net income of $40.6 million on revenue of $562.6 million for the third quarter.
In October, shares of Amerco nosedived 55% after the company announced it had hired a restructuring adviser, Crossroads LLC, and had missed a $100 million debt principal payment.
"The completion of the company's reorganization with our bondholders and lenders will allow us to resume preferred dividend payments," said Joe Shoen, Amerco chairman of the board. "At this time, our focus continues to be on taking steps to reduce debt and enhance our capital position. Several options, including sale of assets, are under consideration."
In October, Standard & Poor downgraded Amerco's credit rating from BB-plus to BB-minus, after Amerco failed to complete a planned $275 million unsecured debt offering and missed the $100 million debt principal payment.