8:35 am, May 23, 2020
Car rental firm Hertz – which has more than 400 outlets across the UK and Ireland – has filed for bankruptcy.
The firm was £15.3bn in debt at the end of March with only £820m of available cash.
It was recently forced to cut 12,000 people from its global workforce and put another 4,000 on furlough, but the measures came too late to save the 102-year-old business.
Former boss Kathryn Marinello said on the company’s first-quarter earnings conference call on May 12 that ‘No business is built for zero revenue’.
She added: ‘There’s only so long that companies’ reserves will carry them.’
Starting in mid-March, the company lost all revenue when travel shut down due to the coronavirus pandemic and it started missing debt payments in April.
Hertz has also been plagued by management upheaval, naming its fourth chief executive in six years on May 18.
In its first-quarter report with securities regulators, the company warned that it may not be able to repay or refinance debt and may not have enough cash to keep operating.
It said: ‘Management has concluded there is substantial doubt regarding the company’s ability to continue as a going concern within one year from the issuance date of this quarterly report.’
Under a Chapter 11 restructuring, creditors will have to settle for less than full repayment, but the business is likely to continue operating.
Hertz has has not commented on how this will affect British and Irish operations.
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