Hertz Pledges to Carry on, Despite Chapter 11 Bankruptcy
May 26, 2020—On Friday, Hertz Global Holdings noted in a company press release its plans to strengthen its capital structure following the both the impact of the COVID-19 pandemic and the company's recent voluntary filing for Chapter 11 reorganization.
Namely, Hertz noted that it currently has $1 billion in cash on hand to support continuing operations.
Hertz Global Holdings Inc. announced that it and its North American subsidiaries have filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.
The press release noted that the impact of COVID-19 on travel demand was sudden, "causing an abrupt decline in the company's revenue and future bookings. Hertz took immediate actions to prioritize the health and safety of employees and customers, eliminate all non-essential spending, and preserve liquidity.
"However, uncertainty remains as to when revenue will return and when the used-car market will full re-open for sales, which necessitated [Friday's] action."
The rental car company noted that its principal international regions including Europe, Australia and New Zealand were not included in the Chapter 11 proceedings, as well as its franchised locations which are not owned by the company.
"Hertz has over a century of industry leadership and we entered 2020 with strong revenue and earnings momentum," said Hertz President and CEO Paul Stone. "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. Today's action will protect the value of our business, allow us to continue our operations and ... better position us for the future. ..."