U.S based car Rental Company Hertz Global Holdings Inc. (HTZ) has announced its ongoing plans whereby the company is currently engaging debt restructuring experts in pursuit of viable options which the company can take after coronavirus pandemic to reinforce its financial outlook.
Information from the company’s insiders indicates the global pandemic has forced demand of rental cars to its lowest levels ever.
Largest shareholder in Florida based Hertz, billionaire Carl Icahn, claims suspension of global travels among economies is to blame for declining performance of the company.
Earlier in the week, Hertz said it will be laying off around 10,000 workers citing tough economic times emanating from the pandemic. As the end of last year the company’s labor force stood at 38,000 employees.
In the debt restructuring plans, Hertz will be seeking professional advice services from law firm White & Case LLP and investment bank Moelis & Co (MC).
Insider sources disclosed since breakout of deadly coronavirus, debt of the company has piled up to a staggering $17 billion, considering a look at the company’s financials this debt is not sustainable.
In addition, the company will be engaging its creditors, to renegotiate terms and conditions of repayments.
Since late February Hertz stock has been plunging drastically, to date the stock is down by almost 75% its value two months ago.
During the last week of March, Hertz claimed to have sourced a debt of $1 billion in cash, this debt will have no maturity date until next year.
According to experts in this field, car renting business started experiencing hard times with entry of ride hailing firms like Uber Technologies Inc.(UBER) and Lyft Inc.(LYFT) in the market.
“The car rental sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment,” read a post in Moody Investors.