Car-rental giant Hertz ‘is preparing to file for bankruptcy with $19BILLION of debt’ after share prices plummet and 10,000 staff are laid off amid the coronavirus pandemic
- Hertz could file for bankruptcy this weekend after skipping car-lease payments last month
- The coronavirus pandemic has crippled the Florida-based company, which was already struggling with billions of dollars in debt
- The company laid off around 10,000 North American workers amid the coronavirus crisis and their share price has plummeted more than 80% this year
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Car rental company Hertz is preparing to file for bankruptcy as soon as this weekend after failing to reach a standstill agreement with its top lenders, The Wall Street Journal reports.
Hertz is the second-largest car rental company in the US, with around 770, 000 vehicles in its fleet – but they do not own the automobiles outright, and instead lease them through ‘separate financing subsidiaries’
The Florida-based company – which also operates the Dollar and Thrifty brands – had been holding talks with creditors after skipping significant car-lease payments due in April.
The bankruptcy filing would make Hertz one of the most prominent companies to default amid the coronavirus pandemic. Clothing brand J. Crew and department stores Neiman Marcus and JCPenney have also declared bankruptcy in the past month.
The Wall Street Journal reports that the company has hired FTI Consulting Inc. as a restructuring advisor for the imminent bankruptcy filing.
Car rental company Hertz is preparing to file for bankruptcy as soon as this weekend after failing to reach a standstill agreement with its top lenders, The Wall Street Journal reports
Car-rental companies have been hit hard by the COVID-19 outbreak, as travel plummets and people shelter in place. Shares of Hertz have fallen 75% this year – and dropped a further 7.5% on Friday.
Last month, the company laid of 10,000 North American employees amidst the crisis.
At the time, Hertz’s Chief Executive Kathryn Marinello said the pandemic had caused ”a major business disruption as global travel demand dropped to almost zero and the U.S. used-car market effectively shut down.’
On Monday, Marinello – who was the third CEO since 2010 – was replaced by the company’s executive vice president Paul Stone.
The Wall Street Journal reports that Hertz has roughly $19 billion of debt.
That staggering amount is made up of $4.3 billion in corporate bonds and loans and $14.4 billion in vehicle-backed debt held at special financing subsidiaries.’
Last month, the company laid of 10,000 North American employees amidst the crisis