Bankrupt car rental firm Hertz gets $1.65B lifeline, stock soaring
The 102-year-old car rental company filed for bankruptcy protection in May
Hertz is slated to receive $1.65 billion in financing as the iconic car rental company navigates bankruptcy during the coronavirus pandemic, which has pummeled the travel industry.
Pending approval by the federal bankruptcy court in Delaware, Hertz' nearly $2 billion lifeline will support the company as it moves through the next stage of the Chapter 11 process, according to the company.
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RENTAL CAR GIANT HERTZ FILES FOR BANKRUPTCY
"This new financing will provide additional financial flexibility as we continue to navigate the pandemic's effects on the travel industry and take steps to best position our business for the future," Hertz CEO Paul Stone said in a statement Friday.
Hertz car rental parking area at Miami International Airport (Photo by: Kike Calvo/Universal Images Group via Getty Images)
Starting in mid-March, the company — whose car-rental brands include Dollar and Thrifty — found its revenue streams cut off when the pandemic brought global travel to a near standstill.
By the end of March, Hertz Global Holdings Inc. had racked up more than $24 billion in debt, according to the bankruptcy filing, with only $1 billion of available cash. The company made “significant efforts” but couldn’t raise money in the capital markets, so it started missing payments to creditors in April, the filing said.
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The company filed for bankruptcy protection in May when lenders were unwilling to grant it another extension on auto-lease debt payments.
The Associated Press contributed to this report.
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