The Atlanta Journal-Constitution
HERTZ EYES BANKRUPTCY EXIT THROUGH $4.2 BILLION STAKE
In a deal to jettison itself from under bankruptcy protection, Hertz Global Holdings Inc. said Tuesday it may sell a controlling stake in the company to two investment firms for $4.2 billion. Knighthead Capital Management and Certares Opportunities will have the chance to buy the entire reorganized car rental company, but no less than a majority of its shares.
Why Hertz is hurting
Hertz was among the first major corporations felled by the pandemic last year as infections surged and shut down travel on a global scale. Hertz filed for bankruptcy protection in May. Sales growth went into negative territory almost immediately, but the 100-year-old company was already experiencing some turmoil.
Better outlook ahead?
However, with the rollout of a suite of vaccines for the coronavirus, pent-up wanderlust is expected to explode. Investors are pouring money into almost any company that caters to travelers. Shares of major airlines are up between 20% and 40% this year. Cruise, lines, hotels and resorts are getting similar interest.
What’s next
Hertz, based in Estero, Florida, said the proposed investment, combined with a new $1 billion first-lien financing, a new $1.5 billion revolving credit facility and a new assetbacked securitization facility to finance its U.S. vehicle fleet, will provide the funding needed for the company to complete its restructuring and emerge from Chapter 11 bankruptcy protection in early to mid summer. The proposed plan still needs court approval. A hearing is set for April 16.