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Hertz Celebrates Chapter 11 Exit, Looks Forward

Hertz is in the process of paying out $19 billion to its creditors while reducing corporate debt by nearly 80%. Stock shares will continue to be publicly traded on the over-the-counter market.

July 1, 2021
Hertz Celebrates Chapter 11 Exit, Looks Forward

Hertz said it has a renewed focus on neighborhood rental locations as a complement to its airport business.

Photo via Atomic Taco/Flickr.

2 min to read


Hertz Global Holdings announced on June 30 that it has officially completed its Chapter 11 restructuring.

In a thumbnail of the financial restructuring, Hertz is in the process of paying out nearly $19 billion to its creditors. Hertz’s creditors will receive payment in cash in full and existing shareholders will receive more than $1 billion of value. Hertz has eliminated nearly $5 billion of debt, including all of Hertz Europe’s corporate debt, and has reduced its corporate debt by nearly 80%.

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Over $5.9 billion of new equity capital is being provided by Hertz’s new investor group. In addition, Hertz has emerged with a new $2.8 billion exit credit facility and a $7 billion asset-backed vehicle financing facility with an aggregate interest rate of less than 2%. Following its restructuring process,

According to bankruptcy Judge Mary Walrath, the outcome “surpasses any result that I’ve seen in any Chapter 11 case that I’ve faced in my 20-plus years.”

On the operational front, Hertz touted its cost reductions and fleet rightsizing, location footprint optimization, and cost reductions for airport concessions, along with the completion of the sale of its Donlen fleet leasing business for $891 million. As demand patterns are changing, Hertz said it has a renewed focus on neighborhood rental locations as a complement to its airport business.

“These efforts, combined with a sharp increase in car rentals in the U.S. and the continued strength in used car sales, are putting the company on track for strong financial results in 2021,” Hertz said in a statement.

“Now with a solid financial foundation, a leaner, more efficient operating model, and ample liquidity to invest in our business, Hertz has outstanding potential to drive long-term profitable growth,” said Paul Stone, Hertz’s president and CEO.

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Hertz filed for Chapter 11 for its U.S. operations on May 22, 2020, following the onset of the coronavirus pandemic. Hertz’s principal international operating regions including Europe, Australia, and New Zealand were not included in the U.S. Chapter 11 proceedings. Hertz’s reorganization plan was confirmed by the bankruptcy court on June 10.

Shares of Hertz common stock will continue to be publicly traded on the over-the-counter (OTC) market, until such time as the company relists on a national securities exchange.

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