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

Car Rental Rates Up, Fleet Sales Down — Correlation?

Car rental companies’ recent fleet discipline is needed now more than ever.

Hertz, Avis Autonomy Partnerships: Good First Steps on a Long Path

Two new autonomous vehicle project partnerships bring the importance of fleet management to the fore.

An Inside Look at Car Rental in China

A trip to a new car rental convention in Guangzhou reveals a booming market, yet one facing unique challenges.

Job Finder: Access Top Talent. Fill Key Positions.

>