Avis Europe gears up for £151m cash call

The heavily-discounted rights issue is priced at 15p per share and 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.

As well as a significant reduction in net debt, from 812 million (668m) at the end of May, Avis said the additional resources generated from the issue 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.

Chief executive Pascal Bazin said the refinancing will enable the group to target higher growth emerging markets, as well as to take advantage of profitable opportunities for growth in its traditional markets.

The rights issue price of 15p a share represents a 57 per cent discount on the mid-market price of Avis shares ahead of the announcement.