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Hertz Gains Temporary Lifeline

Hertz’s lenders have given the company until May 22 “to develop a financing strategy and structure that better reflects the economic impact of the Covid-19 global pandemic.”

May 5, 2020
Hertz Gains Temporary Lifeline

 

Photo courtesy of Hertz.

1 min to read


Hertz Global Holdings Inc. has entered into forbearance and waiver agreements with lenders, as outlined in an SEC filing today.

The company had not made payments due on April 27 in accordance with its operating lease for its rental car fleet. The lenders gave Hertz a one-week extension that expired on Monday.

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The forbearances and waivers provide Hertz with additional time through May 22 “to engage in discussions with its key stakeholders with the goal to develop a financing strategy and structure that better reflects the economic impact of the COVID-19 global pandemic and Hertz’ ongoing operating and financing requirements,” according to the filing.

The move is expected to allay immediate bankruptcy concerns. The company had contracted the services of FTI Consulting Inc., which specializes in restructuring and bankruptcy cases.

As noted in the SEC filing, Hertz also restored the base salaries of executives who had voluntarily reduced their salaries, as reported in a filing from March 26. Effective May 11, the base salaries of senior leaders will be restored to pre-voluntary reduction levels.

CEO Kathryn V. Marinello, who had previously voluntarily forgone her entire base salary, has voluntarily agreed to a 10% salary reduction going forward.

Hertz also noted in the filing it “believes it will not need to acquire new vehicles for its fleet through the remainder of 2020.”

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