Good one!
Hertz to file bankruptcy
Racer
Joined: Aug 2006
Posts: 1,727
Likes: 8
From: USA
Pole Position
Joined: Sep 2002
Posts: 3,275
Likes: 204
From: New York
Lexus Fanatic
Joined: Oct 2003
Posts: 94,543
Likes: 264
From: Virginia/D.C. suburbs
IMO, yes. Leased cars typically have one owner/driver, but rentals go out to everybody and their brother. You have no idea what could have happened to that car over the years. True, a leased car could also have been mistreated, but the chances of it happening are markedly lower.
Hertz lands financing, plans to spend $1 billion on new vehicles
After declaring Chapter 11, it's back in the game
Bankrupt car rental company Hertz Global Holdings Inc said on Friday it had lined up $1.65 billion in debtor-in-possession financing, sending its shares soaring.
Hertz plans to invest up to $1 billion in vehicle acquisitions in the United States and Canada, and up to $800 million for working capital and general corporate purposes. This after listing much of its idled fleet for sale in early summer — nearly 200,000 vehicles.
ADVERTISEMENT"This new financing will provide additional financial flexibility as we continue to navigate the pandemic's effects on the travel industry and take steps to best position our business for the future," said Chief Executive Paul Stone.
Debtor-in-possession is a form of financing for companies in Chapter 11 bankruptcy that allows them to keep operating. The financing will be provided by some of the company's creditors, Hertz said. It has filed a motion for approval of the financing by the U.S. Bankruptcy Court for the District of Delaware.
The more than a century old company's shares jumped 96% to $2.02 in premarket trading.
By the end of March in the coronavirus pandemic, Hertz had racked up more than $24 billion in debt, according to its bankruptcy filing, with only $1 billion of available cash. In late March, Hertz shed 12,000 workers and put another 4,000 on furlough, cut vehicle acquisitions by 90% and stopped all nonessential spending.
Hertz then filed for bankruptcy protection on May 22 after its business was decimated during the pandemic and talks with creditors failed to result in much-needed relief.
Financier Carl Icahn’s holding company is Hertz’s largest shareholder, with a 38.9% stake in the company, according to FactSet.
Hertz plans to invest up to $1 billion in vehicle acquisitions in the United States and Canada, and up to $800 million for working capital and general corporate purposes. This after listing much of its idled fleet for sale in early summer — nearly 200,000 vehicles.
ADVERTISEMENT"This new financing will provide additional financial flexibility as we continue to navigate the pandemic's effects on the travel industry and take steps to best position our business for the future," said Chief Executive Paul Stone.
Debtor-in-possession is a form of financing for companies in Chapter 11 bankruptcy that allows them to keep operating. The financing will be provided by some of the company's creditors, Hertz said. It has filed a motion for approval of the financing by the U.S. Bankruptcy Court for the District of Delaware.
The more than a century old company's shares jumped 96% to $2.02 in premarket trading.
By the end of March in the coronavirus pandemic, Hertz had racked up more than $24 billion in debt, according to its bankruptcy filing, with only $1 billion of available cash. In late March, Hertz shed 12,000 workers and put another 4,000 on furlough, cut vehicle acquisitions by 90% and stopped all nonessential spending.
Hertz then filed for bankruptcy protection on May 22 after its business was decimated during the pandemic and talks with creditors failed to result in much-needed relief.
Financier Carl Icahn’s holding company is Hertz’s largest shareholder, with a 38.9% stake in the company, according to FactSet.
Lexus Test Driver
Joined: Jan 2003
Posts: 5,023
Likes: 530
From: Maryland
People that don't understand how bankruptcy works shouldn't be investing. Someone is going to end up with a bag of nothing buying shares in Hertz. If people think the common stock is going to be worth anything once they emerge from bankruptcy I don't know what to tell you.
Lexus Champion
Joined: Sep 2010
Posts: 2,218
Likes: 300
From: NA
People that don't understand how bankruptcy works shouldn't be investing. Someone is going to end up with a bag of nothing buying shares in Hertz. If people think the common stock is going to be worth anything once they emerge from bankruptcy I don't know what to tell you.
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Lexus Champion
Joined: Sep 2010
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From: NA
Lexus Test Driver
Joined: Nov 2007
Posts: 5,285
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From: NV
No, my question was why you would think that stockholders got "hosed". They're still in Chapter 11.
Lexus Test Driver
Joined: Jan 2003
Posts: 5,023
Likes: 530
From: Maryland
The current common stock will likely be worthless and cancelled and a new class of common stock will be issued to the current holders of their debt when they emerge from bankruptcy. That’s why it makes no sense that people are buying their stock right now and why people that don’t know anything will be left with nothing. Hertz isn’t even hiding anything about this as it’s all over their current filings warning investors.
