Hertz Floats Bankruptcy Exit Led by Investor Group
By Vaishnavi on Mar 03, 2021 | 05:33 AM IST
Hertz [HTZ] Global Holdings Inc. proposed exiting bankruptcy by midyear under the control of new investors, buoyed by an expected rebound in travel and borrower-friendly credit markets.
Hertz’s
restructuring proposal, filed Tuesday, would resolve one of the largest debt
defaults stemming from the Covid-19 pandemic. Under the plan, Knighthead
Capital Management LLC, Certares Management LLC and other co-investors would
pay between $2.3 billion and $4.2 billion for a controlling equity stake in the
rental-car operator.
The
proposed deal, which requires approval from the U.S. Bankruptcy Court in
Wilmington, Del., could be challenged by other creditors and investors,
including by junior bondholders that have been making their own play for
control of Hertz.
The
company filed for
bankruptcy protection last May with roughly $19 billion in debt
after the coronavirus pandemic curbed air and ground travel, especially for
business, sending Hertz’s global revenue down 70% in April 2020 from a year
earlier. Stay-at-home orders also eroded demand for used vehicles, a pillar of
the business.
To
reduce costs, Hertz consolidated rental locations, negotiated with airports to
defer payments and laid off roughly 11,000 U.S. employees, most of whom were
previously furloughed.
Source: Geo news