by Adam Dunning June 21st, 2010
The Dollar Thrifty Automotive Group has announced a new cash injection as it slowly rights itself from a bleak 2009.
Dollar Thrifty has advised that it has raised $300 million in revenue from a three-year financing deal which involved the private placement of asset-backed securities from its rental car operations, giving the company a much needed boost as it continues to come under the spotlight of potential takeover bids from both Hertz and Avis.
The announcement means that Dollar Thrifty has finally managed to swing back into the black over the past financial quarter as the car hire industry starts to see the benefit of increased demand for the Northern Hemisphere summer season. The upturn follows one of the worst years for business across the industry as the recession and slow pace of economic recovery resulted in a massive downturn in travel and bookings, further compounded by the need for lowered rental prices.
Dollar Thrifty is currently in the middle of a protracted takeover battle, with the Avis Budget Group stating that it wished to make a counter offer to the original bid from Hertz, which they have said would be significantly higher than the $1.2 billion tabled by their rival. The negotiations are still proceeding and could take up to several months as either deal will face significant antitrust issues from US regulators.
Dollar Thrifty has also said that it has now raised around $500 million towards vehicle financing, with an additional $300 million expected later this year, ahead of fleet debts of around $600 million that are due in December.