Aug. 7–A Delaware bankruptcy judge on Wednesday approved the sale of ANC Rental Corp.’s assets, nearly 21 months after the Fort Lauderdale parent of Alamo Rent A Car and National Car Rental Systemsought refuge from creditors by filing for Chapter 11.
The sale to Cerberus Capital Management, a New York hedge fund with $9 billion of capital under management, is subject to a final bankruptcy court order — a formality at this point. The deal is expected to close by the end of next month.
“I feel great that it’s done,” said William N. Plamondon III, ANC’s chief executive, in a phone interview. “Employees now know there is a future for the company and an opportunity to go forward, and that’s what it was all about.”
ANC employs about 1,700 people in South Florida and 11,336 in the United States.
U.S. Bankruptcy Judge Mary Walrath approved the deal at a hearing in Wilmington, Del. Cerberus will pay $230 million and assume $2 billion in debt secured by rental vehicles cars and $60 million in nonvehicle debt.
“We are pleased by the judge’s decision approving the transaction and we look forward to rebuilding the brands,” Cerberus spokesman Dick Auletta said by phone. He had no further comment.
Cerberus, which targets underperforming companies to turn around, will operate the Alamo and National brands under the name Vanguard Car Rental USA. ANC, created in 2000 when the car-rental operations of AutoNation were spun off as a separate publicly traded company, will eventually cease to exist.
Car-rental industry veteran William Lobeck, who has been assisting Cerberus in the transaction, was on a plane Wednesday and couldn’t be reached for comment. Cerberus wants Lobeck, who ran Alamo and National when they were part of AutoNation, to oversee the brands again.
ANC filed for bankruptcy Nov. 13, 2001, two months after the terrorist attacks. For ANC, already grappling with a downturn in the economy, the drop in travel after the attacks was too much to overcome.
At the time of the filing, ANC was Florida’s 12th largest public company with $3.5 billion in revenue in 2000.
Despite its problems, ANC sought bankruptcy protection with the intent of reorganizing its debts. It consolidated Alamo and National into a single operation at 176 airports around the country. It trimmed staff. It closed Alamo’s local-market division, geared to customers whose primary vehicle was in the shop. It also reworked deals with its National franchisees.
The moves weren’t enough for ANC to complete a turnaround and the decision was made in January to find a buyer for the assets.
Cerberus was eventually selected from a group of prospective bidders.
The proposed sale initially prompted objections from the unsecured creditors’ committee, which expressed doubts that it generated the highest offer, and others. However, ANC was able to overcome those objections.
Plamondon, who has served as ANC’s CEO since Jan. 1, declined to discuss his future with the company.
“My job was to get it sold, and now we’re just making sure we run the company well in the interim period,” Plamondon said.
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