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Avis raises funds for Dollar Thrifty deal

Avis raises funds for Dollar Thrifty deal

Avis Budget Group has sold $400 million of debt to part finance its proposed acquisition of rival Dollar Thrifty Automotive Group.

Parsippany, New Jersey-based Avis is expected to use the proceeds to repay outstanding debt, as it prepares for the deal.

The move comes after frontrunner Hertz Global Holding ended takeover discussions with Dollar Thrifty after failing to win shareholder support for the deal in a vote last week.

Following the decision, Avis Budget was left as the unexpected winner in a bidding race which has dragged on for much of 2010.

Avis is presently offering $1.53 billion for its smaller rival.


Financial Storm

Avis also confirmed a marginal increase in revenue to approximately $1.5 billion for third quarter ended September 30th.

Preliminary data for the adjusted EBITDA - excluding certain items - increased to $210 to $220 million; pretax income excluding certain items increased to $145 to $155 million; and pretax income increased to $135 to $145 million.

Increase in revenue in the domestic car rental segment resulted from an increase in rental days offset by a decline in time and mileage revenue per day, the company said in a statement.

“We expect our third quarter results will show that vehicle rental demand has begun to strengthen, that our cost-saving initiatives have continued to produce meaningful benefits, and that those two trends have had a significant positive effect on our earnings,” explained said Ronald Nelson, Avis Budget Group chairman.