Hertz is expected to receive $ 1.65 billion in funding as the iconic car rental company goes bankrupt during the coronavirus pandemic that hit the travel industry.
Pending approval by the Federal Insolvency Court in Delaware, Hertz’s nearly $ 2 billion lifeline will support the company as it moves through the next phase of Chapter 11, according to the company.
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CAR RENTAL GIANT HERTZ FILE FILES
“This new funding will provide additional financial flexibility as we continue to focus on the effects of the pandemic on the tourism industry and take steps to better position our business in the future,” said Hertz CEO Paul Stone in statement on friday.
Since mid-March, the company, whose car rental brands include Dollar and Thrifty, has found that its revenues were cut short when the pandemic nearly halted global travel.
By the end of March, Hertz Global Holdings Inc. has accumulated more than $ 24 billion in debt, according to the bankruptcy declaration, with only $ 1 billion in cash. The company made “significant efforts” but was unable to raise money in the capital markets, so it began to miss payments to creditors in April, the statement said.
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The company filed for bankruptcy protection in May, when lenders were reluctant to grant it another extension of debt payments with an automatic lease.
The Associated Press contributed to this report.
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