Hertz is preparing to file for bankruptcy this weekend after failing to reach an agreement with lenders, The Wall Street Journal reported Friday.
Hertz has around $19 billion in debt, including $4.3 billion in corporate bonds and loans as well as $14.4 billion of debt backed by their vehicles, according to The Journal.
The car-rental business has been decimated as the pandemic has ground travel to a halt, forcing Hertz’s CEO to resign as the company missed lease payments and laid off 10,000 workers last month.
Hertz’s stock plunged in after-hours trading following the news.
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Car-rental giant Hertz could file for bankruptcy as soon as this weekend after it was unable to reach an agreement with its biggest lenders, The Wall Street Journal reported on Friday.
Sources told the paper that Hertz is expecting to seek chapter 11 protections, which would make it one of the largest corporate casualties of the coronavirus pandemic’s widespread economic fallout as travel restrictions decimate the rental car industry.
Hertz did not immediately respond to a request for comment.
Hertz has around $19 billion in debt, which includes roughly $4.3 billion in corporate bonds and loans as well as $14.4 billion of debt backed by the company’s fleet of vehicles, and lenders had asked the company for upfront payment on some of those obligations but couldn’t get it to agree, according to The Journal.
Hertz’s business had already been struggling before the pandemic as it tried to fend off competition from other rental agencies as well as ride-hailing businesses like Uber and Lyft. In April, it was forced to lay off 10,000 workers — roughly 26% of its total workforce — and its CEO resigned earlier this week.
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Source:: Business Insider