Alamo, National parent bankrupt
Advertiser News Services
MIAMI — ANC Rental Corp., the parent company of the Alamo and National car rental companies, filed for bankruptcy protection yesterday, a corporate victim of the retreat in travel since the terrorist attacks.
"The drastic decline in travel after Sept. 11 has taken a tremendous toll on our business, and our current capital and expense structure cannot absorb the shortfall," said ANC chairman and CEO Michael Egan. He promised to "continue serving customers while we stabilize the business."
Customers of the two brands will not notice any difference in service, and all reservations will be honored, the company said.
The Fort Lauderdale-based company, fourth-largest in the industry after Enterprise, Hertz and Avis, intends to reorganize its business operations and finances under Chapter 11 bankruptcy protection.
International operations and independent national franchise holders are not affected by the bankruptcy filing in Wilmington, Del.
Nasdaq halted trading in ANC before the markets opened yesterday at a price of 60 cents a share. The stock has declined more than 89 percent in the past year.
The company faced a Thursday deadline for paying lenders $70 million in principal, which had been deferred since September. The company, spun off last year by Florida billionaire H. Wayne Huizenga's Autonation Inc., listed $6.49 billion in assets and $5.95 billion in debts.
Egan warned shortly after the attacks that ANC might not survive without government help, but the airline industry has been the only one to get federal funds.
ANC already has cut its fleet, its work force at headquarters and in the field, hired new senior management and merged the sales forces of the two brands.
An employee at the ANC regional office in Honolulu said no one could comment on whether any employees in Hawai'i may be laid off.
The company went looking for a buyer last month and announced plans to close a reservations center with 260 employees in Charlotte, N.C.
Autonation bought Alamo from General Motors Corp. in 1995 for $625 million as part of a strategy to supply its chain of used-car stores.
Autonation, started by Huizenga and former Thrifty Car Rental head William Lobeck Jr., bought National for $2.3 billion in January 1997.
ANC has more than 3,000 locations and 19,000 employees. National was founded in 1947 and primarily serves the premium business and leisure travel market at airports. Alamo, founded in Florida by Egan in 1974, mainly serves the value leisure market.
About 90 percent of their business relied on airport travelers, who were scaling back travel even before the attacks.
ANC also was losing money before the attacks. It was projecting a loss for the year and had a net loss of $23.6 million on falling revenue in the quarter before its traditional summer boom.
The company had $3.5 billion in revenue last year.
