The group announced in a statement on Wednesday evening that it had completed its restructuring under a reorganization approved by a bankruptcy judge on June 10.
Hertz, with its already weak financial position, has been hit hard by the drop in car rental bookings following the measures taken to stem the spread of the coronavirus pandemic.
The group declared bankruptcy in May 2020 in the United States under a procedure that allows it to reorganize itself away from its creditors. Its activities in Europe, Australia and New Zealand were not affected.
But after the Covid-19 vaccination campaigns, Americans quickly regained a taste for travel and the demand for rental cars jumped, prompting two groups of investors to submit refund offers.
It was ultimately a group led by Knighthead Capital, Certares and Apollo that won and provided Hertz with more than $5.9 billion in new money.
In particular, this enabled the company to reduce its debt by about 80%.
“In the face of the epic and unprecedented challenges presented by the Covid-19 pandemic, and unfazed by the first changes in leadership, we have remained focused on business stability and seizing any opportunity to minimize losses and create value for our stakeholdersThe Chairman commented, Henry Keyeser, in the press release.
“When the economy started showing signs of recovery at the start of the year, we were ideally placed to engage in a competitive process that would maximize recovery offerings.“, he added.
The group has also taken a series of initiatives to reduce costs, by adjusting the size of its fleet, by closing some branches or by negotiating reduced concessions at some airports.
Hertz’s creditors will be paid off and the company’s shareholders will receive more than $1 billion. The stock will continue to trade OTC before it is allowed to enter the main exchange again.
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