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Avis Budget gets OK to amend facility to ease Avis Europe acquisition
By Marisa Wong
Madison, Wis., Aug. 2 - Avis Budget Group, Inc. received lender approval of an amendment to its principal credit facility that will allow it to acquire Avis Europe plc as an indirect subsidiary of existing subsidiary Avis Budget Car Rental, LLC, according to an 8-K filed Monday with the Securities and Exchange Commission.
Specifically, the amendment will allow Avis Budget to access lower-cost financing and to complete the acquisition without issuing any equity securities, according to a company press release.
The amendment also increases the consolidated leverage ratio thresholds by 0.50 for periods after Sept. 30, as well as increases the maximum amount of incremental facilities by $385 million, according to the filing.
In addition, the amendment provides added flexibility under the facility's covenants to accommodate the acquisition of Avis Europe, which is expected to close in early October.
The proposed acquisition was approved by Avis Europe shareholders on Tuesday but is still subject to court approvals and regulatory clearances.
"We are pleased to be making progress on all fronts toward our planned acquisition of Avis Europe," said Avis Budget chairman and chief executive officer Ronald L. Nelson in the release.
"The approval of the transaction by Avis Europe shareholders is a key milestone, and we are moving forward expeditiously on our financing strategies and integration planning. Our expectation that we will be able to finance the acquisition without issuing equity further enhances the attractiveness of the transaction from a financial perspective."
Formal closing of the credit facility amendment is expected to occur in August.
Parsippany, N.J.-based Avis Budget and England-based Avis Europe are vehicle rental companies.
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