Avis Budget Group Shares Rise 34 Percent After Banks Renew Financing

Avis Budget Group Inc., the third- largest U.S. rental-car company, rose 34 percent in New York trading after banks renewed the financing commitments it needs to continue to buy vehicles. Avis climbed 19 cents to 75 cents at 4:15 p.m. in New York Stock Exchange composite trading. They have plunged 94 percent this year.

Cash-strapped customers have cut back on travel during the U.S. recession at the same time that automakers raised prices. Hertz Global Holdings Inc., second to Enterprise Rent-A-Car Co. in size among U.S. rental-car companies, may face similar financing problems if the economy doesn’t improve, said Betsy Snyder, a New York-based bond analyst with Standard & Poor’s.

Avis is also seeking to modify the debt and interest ratios associated with a line of credit. The changes should take effect before the end of the year, the Parsippany, N.J.-based company said today in a statement.

In October, Avis extended the maturity date of its main asset-backed facility for 60 days. The car rental company has cut more than 2,200 jobs, frozen management salaries and closed underperforming locations as part of a plan to reduce costs by as much as $200 million annually by the middle of next year.

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

Five Business Model Trends for 2017

As new forms of mobility take flight, the borders with traditional car rental are starting to erode.

Are Commercial Drone Deliveries Eminent in the U.S.?

Amazon just delivered its first package by drone in England. Will U.S. delivery fleets be able to take advantage soon?

Autonomous Vehicles and the Changing Role of the Fleet Manager

With fewer drivers and substantially longer fleet lifecycles, fleet managers will pivot to new job functions.

Job Finder: Access Top Talent. Fill Key Positions.