The Struggle Continues for Hertz, Now Seeking a Bankruptcy Loan

Steph Willems
by Steph Willems

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]

Steph Willems
Steph Willems

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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

  • GIJOOOE “Sounds” about as exciting as driving a golf cart, fake gear shifts or not. I truly hope that Dodge and the other big American car makers pull their heads out of the electric clouds and continue to offer performance cars with big horsepower internal combustion engines that require some form of multi gear transmissions and high octane fuel, even if they have to make them in relatively small quantities and market them specifically to gearheads like me. I will resist the ev future for as long as I have breath in my lungs and an excellent credit score/big bank account. People like me, who have loved fast cars for as long as I can remember, need a car that has an engine that sounds properly pissed off when I hit the gas pedal and accelerate through the gears.
  • Kcflyer libs have been subsidizing college for decades. The predictable result is soaring cost of college and dramatic increases in useless degrees. Their solution? More subsidies of course. EV policy will follow the same failed logic. Because it's not like it's their money. Not saying the republicans are any better, they talk a good game but spend like drunken sailors to buy votes just like the libs. The sole function of the U.S. government is to take money from people who earn it and give it away to people who didn't.
  • CecilSaxon Sounds about as smart as VW's "SoundAktor"
  • Inside Looking Out Does Cybeertruck use the same stainless steel as Starship?
  • Michael It's a crime it's a pity, it's a low down dirty shame ... .thou shall not kill .
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