DriveTime Automotive Group Inc barkrupt

DriveTime, the national automotive retail chain was sold last week, subject to regulatory approvals, in two separate transactions, including the $700 million sale of its vehicle finance portfolio to Santander Consumer USA Inc., according to an 8-K statement on the Security and Exchange Commission's Web site posted Sept. 14.

The privately held national chain of 91 subprime automotive retail dealerships and 16 reconditioning centers was sold to as-yet-unnamed "new entity owned by third-party investors " for an undisclosed amount. No information was yet available on the third-party investors or whether the dealerships would remain subprime retail outlets.

Santander Consumer purchased DriveTime's finance receivable portfolio, which consists of vehicle-related installment sales contracts, certificates representing its residual interests in securitizations of finance receivables.

Shareholders of DriveTime Automotive Group, DT Acceptance Corp. and DT Credit Company, LLC, "will receive aggregate proceeds of approximately $700 million and the purchasers will assume, refinance or repay certain items of existing indebtedness of DriveTime," according to the 8-K statement.

DriveTime public relations officials declined further comment.

Santander Consumer USA operates Drive, RoadLoans and Santander Auto Finance brands that provide auto lead and lending programs on direct and indirect platforms. The company began originating loans in 1997, and is headquartered in Dallas, Texas. The global bank Banco Santander owns Santander Consumer.

DriveTime's 8-K states that "immediately (after the portfolio sale) a new entity owned by third-party investors will purchase all of the outstanding stock of DTAG and DTAC, effectively acquiring DTAG's used vehicle dealership operations.

The transactions are subject to closing conditions, including the receipt of required regulatory approvals, if any, and, "with respect to the obligations of the purchasers to consummate the Purchase Transactions, the successful completion of an offer to repurchase DriveTime's $200 million publicly traded senior notes."

Ernest Garcia III, DriveTime's founder, acquired the assets of Ugly Duckling, a buy here-pay here chain following its bankruptcy in 1990. Ugly Duckling purchased Champion Financial Services in 1994 and took the company public on the NASDAQ exchange in 1996. Following an aggressive expansion of the firm in Texas and Florida in the late 1990s, Garcia took the company private in 2002 in a management buy out. The company became DriveTime Automotive Group the same year. Current documents list Garcia as the company treasurer, with Mark Sauder listed as Chief Financial Officer and Ray Fidel listed as president and manager.

Originally based in the U.S. Sun Belt, the chain's operations are today located in 18 states including areas as diverse as Los Angeles and Richmond, Va.