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Hertz, a rental company that’s offered many enthusiast-minded special-edition rental cars over the years, filed for bankruptcy protection back in May 2020 after its business was hammered by the COVID-19 pandemic. The firm announced Tuesday it has finalized a restructuring plan that could lift it out of financial trouble by summertime.
In a press release issued on March 2, Hertz says two investment firms, Knighthead Capital Management and Certares Opportunities, will purchase a yet-to-be-determined majority stake in the company for a total of $4.2 billion in the proposed plan. The plan, pending approval from the U.S. Bankruptcy Court for the District of Delaware, will reduce Hertz’s corporate debt and “provide for a less leveraged vehicle debt structure,” according to the company.
“We are excited to reach this important milestone in our restructuring process,” president and chief executive Paul Stone said in a statement. “Our Plan of Reorganization provides us a clear path forward to completing our financial restructuring and emerging from Chapter 11 by early to mid-summer. The support of the [investment firms] demonstrates their confidence in Hertz’s growth potential; moreover, they bring valuable experience in the travel and leisure industry.”
Hertz expects to exit bankruptcy “stronger both financially and operationally,” according to the release.
“We’ve been making excellent progress on our financial and operational initiatives and repositioning our business as we prepare for increased travel demand as the pandemic subsides,” Stone added. “We’re grateful for the commitment of our exceptional employees and teams around the world working tirelessly to maintain smooth operations with safe and outstanding service to our customers . . . Based on actions we’ve taken during the restructuring process, we believe Hertz will be well positioned to resume growth and secure the long-term success of our iconic brand.”
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