Hertz: Car rental firm files for US bankruptcy protection

Murphy_The_Cat

Hertz: Car rental firm files for US bankruptcy protection.

One to keep an eye on, especially if (like me) you've got a trip to the US lined up and you're contemplating the much cheaper "pay now" option or the more expensive "pay on collection" option.

Hertz also owns Thrifty & Dollar.

Westin

This one has been rumoured over past weeks.  

If Chapter 11 I suspect they will operate fairly much as normal, shake off their debits and end up being gobbled up by venture capitalists. I don’t think the Hertz name will go away.

In the US they always used to buy lots of Ford vehicles for rental fleets. If debits get written off or down this might have a massive impact on Ford and other car manufacturers share price.

Murphy_The_Cat

I think that I read that they had debts of $18.5bn and assets of $1bn.  It doesn't sound like a business model that would have people falling over themselves to snap up !

Westin

Depending on the Chapter of bankruptcy they may just be able to lose all or most of the old debt, carry on trading under protective protection from debtors and re-emerge as a new debit free Hertz.   

Murphy_The_Cat

Westin said:

Depending on the Chapter of bankruptcy they may just be able to lose all or most of the old debt, carry on trading under protective protection from debtors and re-emerge as a new debit free Hertz.   

Its quite scary (to me) how the US system works, although it seems quite similar to a UK pre-pack administration operates and leaves creditors hanging.

Westin

It seems it is Chapter 11 bankruptcy protection that they have entered, so hopefully time to pause, reorganise and come out the other side as a viable business.

Hertz also owns Dollar, Thrifty and Firefly brands which are also impacted by this Chapter 11 order.

The bankruptcy protection is for the Hertz Corporation in the USA and does NOT include its international operations. Any pre-paid bookings made for non-US locations should be safe.

Reports indicate that the company has almost $19 billion of debt (double its 2019 revenue) and under $1 billion of cash.  Most of the debt is secured against its fleet of cars. The debt is primarily in the form of bonds which require regular repayments and because of the large number of bondholders, it would apparently be far harder to restructure than bank debt.

MrDisney69

I have rentals with them for this August as we are doing Route 66. Thought of cancelling with a full refund, but can't see them going under. My holiday is a kiss of death to companies, I've booked the flights with Norwegian air! 
Just hope boarders open and we can go, happy to risk a 0.06% chance!

Alan_Bowen

Your car rental will be fine, but there will be no Norwegian flights from the UK to any US destinations this year. The good news is that once they cancel, they are paying refunds relatively quickly

Murphy_The_Cat

Alan_Bowen said:

Your car rental will be fine,

I wish that I was as confident as you about a Hertz booking in August.