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Budget collapses and blames US terrorist attacks

Budget, the world's third largest car and truck rental firm with 110 sites, has collapsed blaming a slump in business following the terrorist attacks in America on September 11.

Sandy Miller, Budget chairman and chief executive, says 9/11 left the firm with a level of non-vehicle debt bigger than its operations could support.

“Combined with a continued focus on improving our performance, reducing our non-vehicle debt through the Chapter 11 process and finalising a solution to our capital structure issues are the right strategic steps to strengthen future growth prospects,” he says.

Cendant, which owns rival firm Avis, is thought to be considering acquiring the company. A merger would allow Avis to reach the top spot in the rental league, which is currently occupied by Ford-owned Hertz.

By filing for Chapter 11, Budget will be able to speed up its plan to reduce its non-vehicle debt and can receive new capital investment while maintaining business as usual. The company has already launched a major shake-up of its UK division, converting 43 wholly-owned corporate outlets into franchised operations.

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