Hertz has put forward a reorganization plan involving private equity, giving it the chance to come out of Chapter 11 bankruptcy.
Under the proposals, the car rental firm, which filed for Chapter 11 bankruptcy in May 2020, could see investment of up to $4.2 billion from Knighthead Capital Management and Certares Opportunities.
The investors and their affiliates would then hold up to 100% of the common stock of the reorganized company.
The proposal would also involve $2.5 billion in additional funds, including a $1.5 billion credit facility, and further financing for Hertz’s U.S. vehicle fleet.
The plan must be approved by the Bankruptcy Court, with a hearing scheduled for April 16, and would mean Hertz could emerge from Chapter 11 some time in the summer.
Paul Stone, president and CEO of Hertz, says: "Our plan of reorganization provides us a clear path forward to completing our financial restructuring and emerging from Chapter 11 by early- to mid-summer. The support of the plan sponsors demonstrates their confidence in Hertz's growth potential; moreover, they bring valuable experience in the travel and leisure industry."
He adds: "Based on actions we've taken during the restructuring process, we believe Hertz will be well-positioned to resume growth and secure the long-term success of our iconic brand.”
Certares and Knighthead recently formed the CK Opportunities Fund, an investment vehicle dedicated to travel and leisure.