And after rumors from the Wall Street Journal, Hertz sank on Wall Street. The headlines of the car rental giant lost 43.66% in after hours trading.Hertz claims to have taken “immediate action” to protect the health and safety of its employees and customers and to have eliminated “all nonessential expenses”. “However – the note explains -, uncertainties remain on the return of income and on the complete reopening of the market, which made today’s action necessary”.
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 stronger 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.