Daily Maverick
Dailymaverick logo

Business Maverick

This article is more than 6 years old

Business Maverick

Hertz Kills Share Sale, Ending Unusual Effort to Fund Bankruptcy

Hertz Global Holdings Inc. called off efforts to raise cash by selling potentially worthless stock after U.S. regulators questioned its highly unusual approach to paying off creditors.
Bloomberg
By Bloomberg
18 Jun
0
Hertz Gets Lenders' Forbearance In Bid To Avert BankruptcySignage for Hertz Global Holdings Inc. stands at a rental location in Berkeley, California, U.S., on Tuesday, May 5, 2020. Lenders granted Hertz an eleventh-hour reprieve from a potential bankruptcy, giving the struggling rental-car company more time to work out a rescue plan after it missed debt payments.

Hertz's board “determined that it was in the best interests of the company to terminate” the offering, according to a Thursday regulatory filing. Hertz said on Wednesday that the stock sale had been suspended while it dealt with issues brought up by Securities and Exchange Commission officials.

Hertz shares resumed trading after an hours-long halt and were down 10% to $1.80 as of 3:30 p.m. in New York. That’s a far cry from the $5.53 price at which the stock closed on June 8.

The almost tenfold increase in the shares from 56 cents on May 26 initially spurred the company to approach a bankruptcy judge with plans to raise as much as $1 billion through an equity offering. It scaled back the sum after the price receded.

Hertz shares give back much of their post-bankruptcy rally

Comments

Loading your account…

Scroll down to load comments...