Global rental-car giant Hertz has been hit hard by the coronavirus and is reportedly on the verge of bankruptcy, The Wall Street Journal reports.
It is reported that Hertz hasn’t made certain payments related to leasing vehicles for its fleets and is in talks with lenders to reduce obligations. Hertz has furloughed many employees and is trying to further reduce monthly expenses to lease vehicles from its special-purpose vehicle-finance subsidiary.
In a regulatory filing, the company said that it’s reached an agreement with holders of the subsidiary’s notes and is engaging in talks with lenders. If Hertz doesn’t make payments by the end of the grace period on May 4 and certain lenders and noteholders don’t agree to waive a resulting default, the company could be materially and negatively affected.
Read Also: Hertz Giving Free Rental Cars To New York City Healthcare Workers
Hertz chief executive officer Kathryn Marinello says the company is doing all it can to preserve cash and get leniency to avoid a bankruptcy filing. It is also pushing the U.S. Treasury Department to help rental-car companies which Marinello says have been hit just as hard as the airline sector by the coronavirus pandemic.
The rental car giant says it has $17 billion worth of debt that includes $3.7 billion of corporate bonds and loans and $13.4 billion of vehicle-backed notes. It recently laid off roughly 10,000 employees in North America alone.
Shares in Hertz fell by 13 per cent during morning trading on Wednesday when the company’s struggles were made public. Its stock has plummeted 73 per cent over the past three months.
