HERTZ FILES FOR BANKRUPTCY PROTECTION
The iconic Hertz rent-a-car pioneer in the US has filed for bankruptcy protection after failing to meet payments on its $17-billion debt, said Niraj Chokshi of the New York Times in a story published on May 22, 2020 (May 23 in Manila.)
Hertz blamed the COVID-19 pandemic for the “rapid, sudden and dramatic” blow to the century-old company as airports shut down in March and it lost business in US airports, which provided the bulk of its revenues, with the company’s cash on hand dipping to only $1 billion.
“The company’s march to bankruptcy began in late April when it missed a payment on a lease for some of its fleet, which includes about 667,000 cars, sport utility vehicles and other vehicles worldwide. It persuaded lenders to give it until midnight on Friday to put together a financial plan that they could accept. But in a filing this month, Hertz acknowledged the enormity of the task,” Chokshi said.
“The bankruptcy filing excludes operations in Australia, Europe and New Zealand as well as the company’s franchisee locations. Hertz also said that it had sought aid from the federal government, but that funding for its industry ‘did not become available,’ Chokshi wrote. Though it had piled up $17 billion in debt, Hertz, which also owns the Dollar and Thrifty brands, was reporting healthy sales at the start 2020. The company’s revenue rose 6 percent in January and February,” he stressed. #coronavirusimpact #COVID19