Hertz Global Holdings received bankruptcy court approval of its plan of reorganization. The plan unimpairs all classes of creditors (who are legally deemed to have accepted it) and was approved by more than 97% of voting shareholders. The court’s approval clears the way for Hertz to emerge from Chapter 11 by the end of June.
As a result of its restructuring efforts, Hertz will emerge from Chapter 11 with a stronger balance sheet and greater financial flexibility than it had prior to the onset of the COVID-19 pandemic, which forced Hertz to file for Chapter 11 relief in May 2020. Hertz’s plan will eliminate more than $5 billion of debt, including all of Hertz Europe’s corporate debt, and will provide more than $2.2 billion of global liquidity to the reorganized company. Hertz also will emerge with a new $2.8 billion exit credit facility consisting of at least $1.3 billion of term loans and a revolving loan facility, as well as an approximately $7 billion asset-backed vehicle financing facility. The plan provides for the payment in cash in full to all creditors and for existing shareholders to receive more than $1 billion of value.
“With the court’s approval of our plan today and a committed new investor group, we are poised to exit Chapter 11 by the end of this month as a well-capitalized and even more competitive company with the flexibility and resources to pursue exciting new growth opportunities,” Paul Stone, president and CEO of Hertz, said. “I want to thank our employees and teams around the world for their hard work, which has enabled us to continue taking great care of our customers. As the demand for rental cars continues to rise, we look forward to helping our customers travel confidently and safely as they get back out on the road and to successfully building on Hertz’s more than 100-year history of quality service as one of the world’s best-known brands.”
White & Case is serving as legal advisor, Moelis & Co. is serving as investment banker and FTI Consulting is serving as financial advisor to Hertz.