Affordable Car Hire has confirmed it is in advanced discussions with Auto Europe about a potential merger.
The car rental broker issued a statement about the deal as reports emerged that it is being sued by Avis Budget for $2.2 million over late payment.
Avis filed a legal action at the District Court of the District of New Jersey on January 27 claiming Affordable has not met monthly payments since last August.
The documents state that Affordable’s directors, Angela Day and husband James Moore, had told Avis Budget that ‘attempting to pay even a significant portion of the funds would render Affordable Car Hire bankrupt’.
In its filing, Avis Budget also accused the couple of focusing on their non car rental divisions, AffordableXtras and Affordable Cruising, as they ‘recognise that Affordable is sinking’.
Moore told TravelMole he could not comment on the legal proceedings but said discussions had been going on for the last few months about a merger with Auto Europe.
Day thanked the UK travel agency community for its ‘continued loyalty and support’ and said she was ‘excited about the possibilities the merger opens up’ for the business.
A statement said Auto Europe, founded in 1954, has an ‘excellent understanding’ of the needs of the travel agency market.
It added: "Imad Khalidi, CEO of Auto Europe, and Niall McDevitt, MD of Auto Europe, believe the merger will strengthen both companies’ product and service as well as provide a solid financial basis for Affordable Car Hire’s future growth."
It said further details of the proposed merger would be announced shortly.
Affordable Car Hire launched AffordableXtras, a new division selling holiday extras, last September.
It sells pre-bookable holiday ancillary products such as airport parking, airport hotels and lounge passes as well as taxi transfers and executive cars.
