I-Cahn-ic, Debt Loaded, & COVID-ed Hertz Goes Chapter 11 After 102 Years

SITUATION:
The absence of cash, revenue, & business caused by the COVID Lockdown along with overburdening debt forced #1 car rental leader to go into Chapter 11 Bankruptcy.
In spite of this, Hertz has a $1B in cash on hand to keep the business going.
Global operations are excluded and  Hertz sought funding from foreign governments,

SIGNIFICANCE:
Debt management & fleet cycling practices caught up with the revolving top management at Hertz.
Combination of ownership strategy, used vehicle values, & servicing debt requirements lead to bankrupt protection.
Carl Icahn owns 40% of the company. No word from him.

SUMMARY:
COVID 19 has impacted car rental, hotels, and travel.
Car rental is cash generating business with dependence on a sustained revenue stream.
One half or about 14,000 employees have been laid off.
Future of the company is uncertain even though analysts are optimistic & believe Hertz can restructure.
Hertz had $17 B in debt.  Strategic missteps contributed to collapse.
40% of the fleet was old and used car market declined. Customers complained.

SAYS:
“I don’t think Hertz is going away, When you think about car rental, you think about Hertz.”  — Betsy Snyder, Credit Analyst
“The fleet had aged to the point that we had customer mutiny.” – Former Hertz Chief Executive John Tague.

STATS:
Hertz has 12,000 corporate locations and franchise operations.

SOURCE(S):
WSJ – https://www.wsj.com/articles/hertz-was-already-in-terrible-shape-the-pandemic-finished-it-off-11590434631

NYT https://www.nytimes.com/2020/05/22/business/hertz-bankruptcy-coronavirus-car-rental.html

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