Car rental giant Hertz "is preparing to file for bankruptcy with $ 19 billion in debt" after stock prices have dropped and 10,000 employees have been fired amid the coronavirus pandemic
- Hertz could file for bankruptcy this weekend after skipping lease payments last month
- The coronavirus pandemic has crippled the Florida-based company that has already struggled with billions of dollars in debt
- The company fired around 10,000 North American workers during the coronavirus crisis, and their share price fell more than 80% this year
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Car rental Hertz is preparing to file for bankruptcy this weekend after failing to reach a standstill agreement with its top lenders, the Wall Street Journal reports.
Hertz is the second largest car rental company in the United States with around 770,000 vehicles in its fleet. However, they do not fully own the cars and instead lease them through "separate financing subsidiaries".
The Florida-based company, which also operates the Dollar and Thrifty brands, had held talks with creditors after skipping key lease payments due in April.
The bankruptcy filing would make Hertz one of the best-known companies in default in the midst of the coronavirus pandemic. The clothing brand J. Crew and department stores Neiman Marcus and JCPenney also filed for bankruptcy last month.
The Wall Street Journal reports that FTI Consulting Inc. has been hired as a restructuring consultant for the upcoming bankruptcy filing.
Car rental Hertz is preparing to file for bankruptcy this weekend after failing to reach a standstill agreement with its top lenders, the Wall Street Journal reports
Car rental companies have been hit hard by the COVID 19 outbreak as travel costs decrease and people seek shelter. Hertz shares fell 75% this year – and fell another 7.5% on Friday.
Last month, the company fired 10,000 North American employees during the crisis.
At the time, Kathryn Marinello, CEO of Hertz, said the pandemic had "caused a major business disruption as global travel demand fell to almost zero and the US used car market had effectively closed."
On Monday, Marinello, who had been the third CEO since 2010, was replaced by the company's executive vice president, Paul Stone.
The Wall Street Journal reports that Hertz has around $ 19 billion in debt.
This amazing amount is made up of $ 4.3 billion in corporate bonds and loans and $ 14.4 billion in vehicle-backed debt held by special finance subsidiaries. "
Last month, the company fired 10,000 North American employees during the crisis