Coronavirus, no creditors agreement: Hertz declares bankruptcy in the USA and Canada


WASHINGTON – 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. “The impact of COVID-19 on the shift demand has been sudden and dramatic, causing a sharp drop in the company’s revenue and future bookings,” he 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.Hertz did not honor the $ 400 million payment for its fleet at the end of last month and, as the Wall Sreet Journal, failed to convince creditors to give her more time to come up with a payment solution. And so today’s deadline is the limit not to be exceeded. Despite $ 17 billion in debt, Hertz started the year with revenues up 6% in January and February. But the coronavirus has caused a sudden drop in demand, causing car rentals to collapse. The picture was then complicated by the drop in used car prices, which caused the value of its fleet to drop.
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.

Source link


Please enter your comment!
Please enter your name here