The Struggle Continues for Hertz, Now Seeking a Bankruptcy Loan

Steph Willems
by Steph Willems
the struggle continues for hertz now seeking a bankruptcy loan

Colossal rental car provider Hertz is on the hunt for life-sustaining cash, but raising it itself now seems out of the question. Hertz Global Holdings, which filed for bankruptcy in May, recently moved ahead with a plan to raise a cool half-billion through a stock sale, only for the Securities and Exchange Commission to step in and say “hey, whoa, no more of that.”

Left with no other option, Hertz is now seeking a bankruptcy loan.

According to Bloomberg, the rental car giant announced its loan hunt in a Monday regulatory filing that quickly went to work sinking the company’s stock. Hertz shares fell 12 percent in Tuesday trading.

After buying time for debt restructuring with U.S. securities holders, Hertz stemmed some of the bleeding by punting a large amount of its rolling stock onto the red-hot used car market. 100,000 vehicles left its possession in June and July, with 182,000 more to go. Its fleet level is down 30 percent.

Still, the cratering of the rental car market at the hands of the coronavirus pandemic exerted far more fiscal force.

Hertz said revenues fell 67 percent in the second quarter of 2020, with the company posting an $847 million loss. The stock sell kiboshed by the SEC still raised some $29 million, Hertz said. And while air travel volume has grown since the depths of this spring’s lockdown, with a corresponding uptick in car rentals, Hertz doesn’t have time to wait for normality to return.

From Bloomberg:

Without an extension beyond Sept. 30, Hertz must start making payments on its European fleet, which is owned by investors who hold its asset-backed securities. Hertz already has reached an agreement allowing it to use much of its U.S. fleet with a commitment to pay securities holders US$108 million a month from July until the end of the year.

Hence the pressing need for a loan. In its Monday filing, Hertz notified shareholders that sunny times are not just around the corner as it moves through the bankruptcy process.

[Image: vieninsweden/Shutterstock]

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  • APaGttH APaGttH on Aug 12, 2020

    Die

  • -Nate -Nate on Aug 13, 2020

    ? Has anyone here looked at or purchased a Hertz vehicle ? . -Nate

    • See 4 previous
    • -Nate -Nate on Aug 13, 2020

      @highdesertcat Thanx, kinda-sorta ..... I'm still pretty happy with my little 2001 Ranger trucklet, I was hoping / expecting some here to have looked into this or bought one.... I'm afraid to go look in case they have some bottom of the barrel base model with a 6 cylinder, slushbox and AC.... In white of course . -Nate

  • MaintenanceCosts We hear endlessly from the usual suspects about the scenarios where EVs don't work as well as gas cars. We never hear the opposite side of the coin. From an EV owner (since 2019) who has a second EV reserved, here are a few points the "I road trip 1000 miles every day" crowd won't tell you about:[list][*]When you have a convenient charging situation, EV fueling is more convenient than a gas car. There is no stopping at gas stations and you start every day with a full tank.[/*][*]Where there are no-idling rules (school pickup/dropoff, lines for ferries or services, city loading, whatever else) you can keep warm or cool to your heart's content in your EV.[/*][*]In the cold, EVs will give you heat from the second you turn them on.[/*][*]EVs don't care one bit if you use them for tons of very short trips. Their mechanicals don't need to boil off condensation. (Just tonight, I used my EV to drive six blocks, because it was 31 degrees and raining, and walking would have been unpleasant.)[/*][*]EVs don't stink and don't make you breathe carcinogens on cold start.[/*][*]EV maintenance is much less frequent and much cheaper, eliminating almost all items having to do with engine, transmission, or brakes in a gas car. In most EVs the maintenance schedule consists of battery coolant changes and tire maintenance.[/*][*]You can accelerate fast in EVs without noisily attracting the attention of the cops and every passerby on the street.[/*][/list]
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  • Tree Trunk Been in the market for a new Highlander Hybrid, it is sold out with order time of 6 months plus. Probably would have bit the bullet if it was not for the dealers the refuse to take an order but instead want to sell from allotment whether it fits or not and at thousands over MRSP.
  • AKHusky The expense argument is nonsense. My mach e was $42k after tax credit. Basically the same as similarly equipped edge. And it completely ignores that the best selling vehicles are Rams, F150s, and Silverados, all more expensive that a bolt, MAch e or ID4. As an owner, I'd say they are still in second car territory for most places in the country.
  • Johnster I live in a red state and I see quite a few EVs being purchased by conservative, upper-class Republicans (many of them Trump-supporters). I suspect that it is a way for them to flaunt their wealth and that, over time, the preference for EVs will trickle down to less well-off Republicans.
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