Avis Europe makes cash call

CAR rental group Avis Europe moved to shore up its balance sheet today by announcing plans to raise £151m from shareholders.

The heavily-discounted rights issue has already won the support of Brussels-based motoring services firm D'Ieteren, which owns 60 per cent of the company.

Avis - a supplier of vehicles to seven million customers a year through the Avis and Budget brands - has also secured new credit facilities to replace the current arrangement which had been due to expire in February.

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As well as a significant reduction in net debt, from 668m at the end of May, Avis said the additional resources generated from the issue of new shares would allow it to target growth opportunities.

It said it continued to trade in line with expectations after rental income grew in March for the first time since May 2008.

Demand has been lower in France, Germany, Italy and Spain, but the UK has delivered a resilient performance as the firm gains market share.