By on August 12, 2020

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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12 Comments on “The Struggle Continues for Hertz, Now Seeking a Bankruptcy Loan...”


  • avatar
    SCE to AUX

    What’s in it for the lender? The cars can’t be collateral since they are owned by other banks.

    Nope, no way. Maybe Hertz’ demise will allow the other rental agencies to survive on the remaining scraps of business that exist.

  • avatar
    brn

    Whoa, let me get my checkbook!

  • avatar
    ect

    I don’t believe I’ve ever seen a bankruptcy proceeding in which the shareholders weren’t wiped out. So, it mystifies me that the company’s stock continues to trade at all.

  • avatar

    Better idea from San Francisco: make all renters full time employees of Hertz corp with health and life insurance benefits. Fair competition with Uber and Lift.

  • avatar
    APaGttH

    Die

  • avatar
    -Nate

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

    -Nate

    • 0 avatar
      87 Morgan

      Several dealers that I know have reached out to the local Hertz facilities inquiring about purchasing inventory. From what I have gathered, the units that were available were trashed.

      They have a thousands of desirable units: Suburbans, Tahoe, F150, Silverado, Expedition along with mid size CUV’s they can off load. They can keep the Altimas and Sentras..

    • 0 avatar
      highdesertcat

      ? Has anyone here looked at or purchased a Hertz vehicle ?

      There are a number of individuals I have known over the decades who bought from Hertz in El Paso, TX. One guy I know even bought two the same year after coming back from his tour in Japan; a loaded Ford Taurus, and a loaded Aerostar. He and his wife drove them for many years, until they replaced them with brand-new vehicles.

      And while my brothers still were in business, they took in ‘program cars” for retail sales.

      I’ve never bought a rental fleet car because many of them never get serviced while a rental and often show up way overdue for oil&filter change, with trashed interiors, dings and dents beyond fair wear and tear.

      And usually they’re traded with ~24K miles on the odo, which means less factory warranty coverage remaining, but with a lot more wear and tear.

      • 0 avatar
        -Nate

        Thanx .

        Long, long ago I looked at some used rental near L.A.X., I don’t remember the rental company but this one car was indeed thrashed .

        I’ve driven lots of rentals cars & light trucks across America and with a very few exceptions they were all nice .

        I was wondering about a stripper short bed American pickup….

        -Nate

        • 0 avatar
          highdesertcat

          Nate,

          https://www.autoweek.com/news/g33563799/15-cars-you-can-buy-from-hertz-for-dollar15000-or-less/

          This will get you started.

          • 0 avatar
            -Nate

            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

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