Hertz Global Holdings, a car rental company more than a century old, filed for bankruptcy on Friday after its business was wiped out during the coronavirus pandemic and talks with creditors did not result in much-needed relief. .
Earlier in the day, Hertz’s board approved the company to seek Chapter 11 protection in a U.S. bankruptcy court in Delaware, according to court records. Its international operating regions, including Europe, Australia and New Zealand, were not included in North American procedures, the company said.
The company, whose largest shareholder is billionaire investor Carl Icahn, with an equity stake of almost 39%, suffers from government orders that restrict travel and require citizens to stay at home. Much of Hertz’s revenue comes from renting cars at airports, which has largely disappeared as potential customers shy away from air travel.
With nearly $ 19 billion in debt and approximately 38,000 employees worldwide by the end of 2019, Hertz is among the largest companies to be undone by the pandemic. The public health crisis has also caused a cascade of bankruptcies or bankruptcy requests among companies dependent on consumer demand, including retailers, restaurants and oil and gas companies.
So far, US airlines have avoided similar destinations after receiving billions of dollars in government aid, a path that Hertz has unsuccessfully explored.
On May 16, the board appointed executive Paul Stone to replace Kathryn Marinello as chief executive. Hertz previously laid off some 10,000 employees and said there was substantial doubt about its ability to remain a constant concern.
Hertz previously signaled that it could avoid a recovery claim if it received relief from creditors or financial aid that the company and its competitors requested from the U.S. government. The US Treasury began to help businesses as part of an unprecedented $ 2.3 trillion Congressional sanctioned relief package.
Even before the pandemic, Hertz and its peers were under financial pressure, as travelers flocked to services like Uber.
Hertz has its roots in 1918, when Walter Jacobs, then a pioneer in car rental, founded a company that allowed customers to temporarily drive one of a dozen Ford Model Ts, according to the company’s website.
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