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Avis Budget buys stake in Brazilian licensee

PARSIPPANY, N.J. (AP) -- Avis Budget Group Inc. said Monday that it reached a deal to buy a 50 percent ownership stake in its existing Brazilian licensee for about $50 million.

The Parsippany, N.J.-based rental car company said the investment will allow it to significantly boost the presence of its Avis and Budget brands in the fast-growing Brazilian car rental market. Avis has operated in Brazil since 1978. Its licensee has operating the Avis brand there since 2003 and the Budget brand since 2005.

The company's Brazilian operations include a fleet of more than 4,000 vehicles and more than 40 rental locations. Last year, the operations generated about $50 million in rental revenue.

Avis said it expects to record a third-quarter impairment charge of $30 million related to the investment, mainly related to the licensee's pre-existing debt.