Hertz on track to exit bankruptcy protection this month

Business News

FILE – In this May 6, 2020, file photo, a Hertz car rental is closed during the coronavirus pandemic in Paramus, N.J. A bankruptcy court has confirmed Hertz’s reorganization plan, Thursday, June 10, 2021, which helps clear the way for the car rental company to emerge from Chapter 11 bankruptcy protection by the end of the month. (AP Photo/Ted Shaffrey, File)

Hertz will likely emerge from Chapter 11 bankruptcy protection by the end of the month after a bankruptcy court confirmed the reorganization plan for the beleaguered car rental company.

Hertz Global Holdings Inc., which filed for bankruptcy protection in May 2020, said Thursday that its plan will erase more than $5 billion in debt and provide more than $2.2 billion in liquidity. Creditors will be paid in full and existing shareholders will receive more than $1 billion in value.

Hertz was among the first major corporations to be felled by the pandemic last year as infections surged and shut down travel on a global scale for both companies and vacationers.

It announced in March that it might sella controlling stake in the company to two investment firms for $4.2 billion. Knighthead Capital Management and Certares Opportunities would have the chance to buy the entire reorganized car rental company, but no less than a majority of its shares. The proposed investment, combined with a new $1 billion first-lien financing, a new $1.5 billion revolving credit facility, and a new asset-backed securitization facility to finance its U.S. vehicle fleet, was eyed as a way to provide the funding needed for the company to complete its restructuring.

Hertz’s emergence from bankruptcy protection comes at a time when Americans are getting vaccinated for COVID-19 and eager to start traveling again. Demand for car rentals is surging, and with limited supply, prices are skyrocketing.

The Florida company runs the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Business News

More Business News

Political News

More Political News

Technology News

More Technology News

Science News

More Science News

Entertainment News

More Entertainment News

Odd News

More Odd News

The Markets

More The Markets

Associated Bank Market Outlooks and Thought Leaders

More The Opening Bell