Hertz files for bankruptcy protection in the United States
Hertz Global Holdings has filed for bankruptcy in the United States.
The car rental giant is seeking chapter 11 protection as it seeks to reorganise its business in the wake of the coronavirus pandemic.
The company said the impact of Covid-19 on travel demand had been sudden and dramatic, causing an abrupt decline in the revenue and future bookings.
Uncertainty remains as to when revenue will return and when the used-car market will fully re-open for sales, which necessitated the action, Hertz said.
The financial reorganisation will provide a path toward a “more robust financial structure” that best positions the company for the future, added a statement.
Operating regions including Europe, Australia and New Zealand are not included in the filing.
“Hertz has over a century of industry leadership and we entered 2020 with strong revenue and earnings momentum,” said newly appointed Hertz chief executive, Paul Stone.
“With the severity of the Covid-19 impact on our business, and the uncertainty of when travel and the economy will rebound, we need to take further steps to weather a potentially prolonged recovery.
“Today’s action will protect the value of our business, allow us to continue our operations and serve our customers, and provide the time to put in place a new, stronger financial foundation to move successfully through this pandemic and to better position us for the future.”
Hertz said all brands - including Dollar, Thrifty, Firefly, Hertz Car Sales, and Donlen - are open and serving customers.
As of the filing date, the company had more than $1 billion in cash on hand to support its ongoing operations.
Depending upon the length of the Covid-19 induced crisis and its impact on revenue, the company said it may seek access to additional cash, including through new borrowings, as the reorganisation progresses.