Hertz has suspended its plan to issue up to $500 million in stock shares, according to a Securities and Exchange Commission filing today.
The filing states that Hertz was advised by the SEC’s Division of Corporation Finance on June 15 that it intended to review the prospectus supplement. Earlier in the day, Hertz notified the SEC its intent to sell the shares.
On June 12, the U.S. Bankruptcy Court for the District of Delaware granted Hertz approval to sell up to $1 billion in stock.
“After discussions with the (SEC) staff, sales under the ATM Program were promptly suspended pending further understanding of the nature and timing of the staff’s review.”
"Typically when the SEC issues comments on a proposed offering as Chairman Clayton said, the issuer considers them and makes the necessary changes in the papers filed,” said Thomas Gorman, partner at the international law firm Dorsey Whitney and an expert on SEC enforcement.
“If there is a disagreement then usually there is a discussion and the question is resolved. While the SEC could let the offering go effective if there is no resolution, that would be most unusual. That would not necessarily be the end of the matter however. The Commission could file an enforcement action. I would seriously doubt that Hertz would want to take that risk,” Gorman said in a statement offered to Auto Rental News.
Hertz stock was suspended for several hours on Wednesday but resumed later in the day. Shares closed at $2.03.