Car rental, the coronavirus goes bankrupt the Hertz giant in the USA and Canada

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chapter 11

The application concerns the United States and Canada. Operations in other areas, including Europe, Australia and New Zealand, are not included

(AFP)

The application concerns the United States and Canada. Operations in other areas, including Europe, Australia and New Zealand, are not included

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The global car rental giant Hertz, in crisis due to the consequences of the coronavirus, has filed for bankruptcy in the United States and Canada. The company announced it in a statement.

Europe excluded from the application

“The impact of COVID-19 on the demand linked to the services for the move has been sudden and dramatic, causing a sharp drop in the company’s revenue and future bookings,” the group said in a press release. Operations in other areas, including Europe, Australia and New Zealand, are not included in the Chapter 11 filing in the United States.

Actions to cut expenses

Hertz claims to have taken “immediate action” to protect the health and safety of its employees and customers and to have eliminated “all non-essential expenses”. “However – the note explains -, uncertainties remain about the return of income and the complete reopening of the market, which made today’s action necessary”.

Financial reorganization

On April 21, Hertz had cut 10,000 jobs in North America, or 26.3% of its global workforce, in an attempt to preserve liquidity in view of the uncertainties resulting from the pandemic. The use of “Chapter 11” is a device that allows a company that can no longer repay its debt to reorganize itself away from creditors.

“The financial reorganization will provide Hertz with a path to a more solid financial structure that will position the company better for the future,” concludes the note. Franchise sites that do not belong to the company are also excluded from the procedure.



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