ANC Rental Corp. To Sell National, Alamo To Investor

ANC Rental Corp., the parent company of National Car Rental and Alamo Rent A Car, which is based in Fort Lauderdale, Fla., has signed an agreement to sell National and Alamo to Cerberus Capital Management LP, a private New York investment firm, for $290 million. The sale culminates the restructuring effort ANC has undertaken since filing for bankruptcy protection in November 2001.

The sale, which ANC hopes the U.S. Bankruptcy Court for the District of Delaware will approve in a hearing set for Aug. 6, requires Cerberus to pay $230 million in cash. The investment firm would assume $60 million in non-vehicle debt and provide $150 million in working capital. It also would assume more than $2 billion in vehicle debt plus other current liabilities.

As part of its restructuring effort, ANC has consolidated Alamo and National at many airport rental counters (with separate agents for each brand) and taken other steps that have more tightly bound the two brands together. There's still a chance that another new suitor might emerge: On June 18, the bankruptcy court will hold a hearing to approve the formal bidding procedures, which will open the door for other qualified buyers to submit competing bids.

However, should the agreement with Cerberus not go through, ANC would be required to pay the investment firm a $12.5 million breakup fee, plus up to $1.5 million in costs.