Hertz Global Holdings filed for Chapter 11 bankruptcy
protection last Friday, though the car rental company said it would be able to
continue operations as it begins restructuring.
The company had been negotiating with creditors to reduce
payments required under its vehicle operating lease as its revenues plummeted
due to the Covid-19 crisis. It was not able to negotiate long-term agreements
with creditors, nor was it able to access assistance from the U.S. government,
according to Hertz.
“With the severity of the Covid-19 impact on our business,
and the uncertainty of when travel and the economy will rebound, we need to
take further steps to weather a potentially prolonged recovery,” newly
appointed president and CEO Paul Stone said in a statement. “Today’s action
will protect the value of our business, allow us to continue our operations and
serve our customers, and provide the time to put in place a new, stronger
financial foundation to move successfully through this pandemic and to better
position us for the future.”
Hertz now will file “First Day” motions to enable it to
continue operations. All brands, including Hertz, Dollar and Thrifty, will
continue operations, and current reservations, vouchers and loyalty program
points will be honored, according to Hertz. The company currently has more than
$1 billion in cash available to support continuing operations, Hertz reported.
Hertz already has been reducing its fleet through vehicle
sales and canceled orders, consolidating off-airport rental locations and has
laid off or furloughed about half of its global workforce, about 20,000
employees.
The bankruptcy filing includes Hertz and its U.S. and
Canadian subsidiaries. Its franchised locations and operations in Europe,
Australia and New Zealand are not included in the Chapter 11 proceedings.
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Source: Business Travel News