Another company files for bankruptcy in the United States: Hertz. Hertz is the second largest company in the US car rental business. The coronavirus and debts bankrupted Hertz.
Hertz filed for bankruptcy protection on Friday against his inability to resist the coronavirus pandemic, which has paralyzed global travel and business for this indebted vehicle rental company for 102 years.
Creditors at the Estero, Florida-based company were unwilling to grant another extension to its debt payments beyond a deadline that expired on Friday, so the firm filed its documents with a Federal Bankruptcy Court in Delaware. AP reported.
Hertz and its subsidiaries will continue to operate, the company said in a statement. The main international regions where Hertz operates and the locations where it has franchises are not included in the bankruptcy support application, he added.
At the end of March, Hertz Global Holdings Inc. had a debt of more than $ 24 billion and had only $ 1 billion in cash on hand.
From the middle of that month, the company – whose car rental brands include Dollar and Thrifty – was left without any income due to the paralysis of trips due to the coronavirus, and in April began to stop making payments. Hertz has also had administrative difficulties, and on May 18 he named his fourth CEO in six years.
“No business is made to capture zero revenue,” former CEO Kathryn Marinello said during a conference call on May 12, referring to the company’s first-quarter cash inflows. “Company reserves can hold them only for a certain time.”
In late March, Hertz laid off 12,000 workers, licensed another 4,000, cut vehicle purchases by 90%, and canceled all non-essential expenses. The company said it would save $ 2.5 billion a year with these measures.
The coronavirus hit has accomplished what neither the 2008 crisis nor the 1973 crash could: Hertz, the car rental company founded in 1918, files for bankruptcy https://t.co/gjBvlUZrbC
– EL PAÍS (@el_pais) May 23, 2020
However, the cuts were adopted too late to save Hertz, the second largest car rental company in the country. It was founded in 1918 by Walter L. Jacobs, who started in Chicago with a fleet of a dozen Ford T-models. Jacobs sold the company, initially called Rent-A-Car Inc., to John D. Hertz in 1923.
In a note to investors in late April, Jefferies analyst Hamzah Mazari forecast that rival company Avis would survive the coronavirus crisis, and that Hertz had only a 50% chance “because it was slower in the decline of costs ”.
On May 18, Hertz appointed Paul Stone, then COO, as CEO, and announced that Marinello would leave the position and be on the company’s board of directors.
Telecommunications company Digicel files for bankruptcy
Jamaica-based telecommunications and entertainment company Digicel, which serves more than 20 islands in the region, Central America and Oceania, filed for bankruptcy reorganization in court Tuesday.
A Digicel spokesman said the New York filing to file for Chapter 15 bankruptcy will not affect the company’s operations in the 32 markets it serves from its headquarters.