Rental car company Hertz Global Holdings Inc. has entered the initial public offering market with its filing of a $1 billion offering with the Securities and Exchange Commission this month under the symbol “HTZ”, the Associated Press reports.

The sole purpose of the Hertz IPO is to repay the $1 billion debt incurred when the company took out a loan to pay a special dividend of $999.2 million to its private equity shareholders, according to the Associated Press.

With car rental industry revenues up and Hertz’s prices and rental volumes rising, the positive trends seen in other travel-related sectors are in evidence here as well.

However, automakers are working to end their dependency on bulk, low-margin sales to rental car companies, making industry reliance on “program cars” and their pre-determined devaluation a thing of the past.

Hertz and other car rental agencies will have to rely on their computerized fleet management systems, which the company has invested in heavily and perfected over the course of thousands of transactions, to help mitigate the increased risk posed by non-program cars.

0 Comments