The company said that the recapitalization would not affect its ability to service its car and truck rental customers. Budget said it would continue to operate on a business as usual basis with regard to its employees, customers and vendors.

As part of this initiative, Budget did not make the $18.5 million senior notes interest payment due on April 1. It has made all principal and interest payments relating to its vehicle fleet financing.

In addition, Budget announced that it has filed an extension request with the SEC relating to its annual report on Form 10-K for the year ended December 31, 2001. Budget expects to file the annual report on or about April 15.

"Despite a challenging economy, we are seeing signs of improvement as evidenced by a rise in car rental industry pricing and increases in the company's vehicle utilization and revenue per vehicle," chairman & CEO Sandy Miller said.