Company restores executive pay while it staves off bankruptcy

Rental car giant Hertz Global Holdings has until May 22 to come up with new plan to avoid liquidating vehicles or other issues.

By Business Observer Staff
| 4:15 p.m. May 5, 2020
| 0 Free Articles Remaining!

Courtesy. Hertz shares, which had fallen as much as 36% before the start of regular trading May 5, were down 16.16% for the day, to $3.01 a share

Charlotte–Lee–Collier

ESTERO — Rental car giant Hertz Global Holdings has signed an agreement with several lenders that gives the company until May 22 to find a plan that avoids filing for Chapter 11 bankruptcy. The company, according to a public filing, also restored salaries of employees and executives, including CEO President and CEO Kathryn Marinello, that had been cut in the early days of the coronavirus pandemic.

The Estero-based firm, which posted $9.8 billion in revenue in 2019, entered into forbearances and limited waivers with some of its lenders and holders of its asset-backed vehicle debt, according to a public filing. The forbearances, usually an agreement between a lender and borrower to delay a foreclosure, “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,” the firm says in the documents, filed May 5 with the Securities and Exchange Commission.

“As a result of the COVID-19 global pandemic, Hertz and its subsidiaries have experienced a rapid, sudden and dramatic negative impact on their businesses. While Hertz has taken aggressive action to eliminate costs, it faces significant ongoing operating expenses, including monthly payments under its (amended lease) agreements,” the firm adds in the filing. “As previously reported, on April 2, Hertz did not make certain payments in accordance with the Operating Lease.”