Hertz Global Holdings has an investment partner to lead it out of bankruptcy.

Hertz announced on April 3 that it has selected a renegotiated proposal from Centerbridge Partners, Warburg Pincus, and Dundon Capital Partners to provide the equity capital required to fund Hertz's exit from Chapter 11. Hertz said it is on track to conclude its Chapter 11 case in June 2021.

Hertz chose the Centerbridge group over a competing proposal from Certares Management and Knighthead Capital Management.

Hertz said the proposed transaction, which remains subject to approval by the bankruptcy court, is supported by holders of over 85% of the company's unsecured notes, which comprise “the vast majority” of creditors in the largest class of claims voting on the plan. This level of creditor support for the Centerbridge proposal gave it the clear advantage, Hertz said.

In the statement, Hertz noted that both proposals had advanced to the point where either one would leave the company “in a significantly strengthened financial position” and would provide bridge financing to fund the company's European fleet needs prior to the plan's consummation.

At exit, under both proposals, the company would eliminate approximately $5 billion of debt, have over $2 billion of global liquidity, and completely eliminate all corporate debt on its European business.

The supporting noteholders have agreed to support the exchange of the unsecured funded debt claims against Hertz for about 48.2% of the equity in the reorganized company and the right to purchase an additional $1.6 billion of equity. They have also committed to purchase, or otherwise backstop, the full $1.6 billion of equity being offered to the holders of Hertz’s unsecured funded debt.

Holders of $852 million of European vehicle notes will be paid in cash in full under the plan, while creditors of general unsecured claims will get a recovery of about 75%. Hertz’s existing equity will be canceled and receive no distribution.