Budget Rent-A-Car parent files for Chapter 11
Monday, July 29th 2002, 12:00 am
By: News On 6
DAYTONA BEACH, Fla. (AP) _ The parent of Budget Rent-A-Car, the world's third-largest car and truck rental company, filed for Chapter 11 bankruptcy protection Monday, blaming the post-Sept. 11 drop-off in travel.
Budget Group Inc., which also rents trucks under the Ryder name, said customers will not be affected by the filing in U.S. Bankruptcy Court in Wilmington, Del.
The Daytona Beach-based group listed assets of $4.05 billion and debts of $4.33 billion.
``The impact of Sept. 11 and the continued recession in the travel sector has left Budget Group with a level of non-vehicle debt greater than our operations can reasonably support,'' Sandy Miller, chairman and chief executive, said in a statement.
Chapter 11 allows a company to continue operating and hold its creditors at bay while it puts its finances in order. Budget said it has lined up $850 million in financing.
Budget Rent-A-Car Systems, Ryder Move Management Inc., Ryder Relocations Services Inc. and Ryder TRS Inc. are among the 48 subsidiaries covered in the bankruptcy filing.
Ryder System Inc. and its subsidiary Ryder Truck Rental Inc. are not affiliated with the Budget Group.
The company said none of its franchisees will be affected by the Chapter 11 filing.
``We wish to emphasize that we continue normal operations and will honor all reservations,'' said company spokeswoman Kimberly Mulcahy. She said the company will continue to pay its employees as usual and anticipates no layoffs.
Budget was delisted by the New York Stock Exchange this year after falling to 20 cents per share from a peak of $39 in 1998. Budget stock began falling that year after the company acquired Ryder TRS for $700 million, including the assumption of $440 million in debt.
The Chapter 11 filing comes 8 1/2 months after another car rental company, ANC Rental Corp., filed for bankruptcy protection in the same court. ANC Rental owns and operates car rental businesses under the brand names of Alamo and National.