Hertz Global Holdings Inc (HTZ)

[deekshant]

IS FED BAILOUT IN WORKS

Wanted to add some meaningful coverage. So, did Carl Icahn, who owns about 38% of its shares outstanding really walked away by selling. And, no one thinks he might reenter through back door. Not convincing to me. With FED money supply and focus on main street, this just might get a boost like what happened to GM.
"
Carl Icahn’s car-rental company, Hertz, is seeking a bailout from Uncle Sam to fend off a looming cash crunch that threatens to push it over the edge, The Post has learned.

Hertz, along with the rest of the rental-car industry, has been appealing to the Treasury Department and Federal Reserve for a series of bailout measures, including loans, tax breaks and government guarantees on tens of billions in asset-backed loans, sources said. The bailout stands to help Hertz most as it’s the most leveraged, sources added.

Without a bailout, Hertz, which did not respond to requests for comment, could also be sold, according to Mazari, who says the healthier Avis would be the most obvious buyer. Any sale would likely be done in bankruptcy, however, Hertz sources predicted.

Talks with lenders are being handled by company executives, as well as Icahn, who owns a 39 percent stake in Hertz. Pleas to the feds are being directed by Sharon Faulkner of the American Car Rental Association through Treasury Deputy Secretary Justin Muzinich, a source said.

In seeking a government bailout, the car-rental industry has argued that its failure could directly impact Detroit, which relies on it for bulk sales."
https://nypost.com/2020/04/15/car-rental-firm-hertz-seeks-coronavirus-bailout/

Hertz, for its part, last month pointed to the fact that it doesn’t face significant debt maturities until mid-2021.

At their peak in 2014, Hertz’s market capitalization was more than $14 billion and Avis’s was $7.2 billion. Those figures are down to $574 million and $835 million, respectively, drawing some comparisons to penny stocks.

Read more at: https://www.bloombergquint.com/gadfly/coronavirus-no-government-bailout-dooms-rental-car-bonds
Copyright © BloombergQuint

Hertz has been negotiating with lenders for relief as well as with the U.S. Treasury Department about the possibility of a bailout. But with dismal demand, a too-big fleet and plunging prices for used cars, the company is running short on liquidity to last until a market recovery.


That final investment increased the size of Icahn's stake by 26%, giving him 39% of Hertz's shares. And it brought the total investment in the company over the last six years to $2.3 billion.

""I believe that based on a plan of reorganization that includes new capital, Hertz will again become a great company. I intend to closely follow the company's reorganization and I look forward to assessing different opportunities to support Hertz in the future.""
https://edition.cnn.com/2020/05/28/investing/carl-icahn-hertz-bankruptcy-loss/index.html

The company has been renting cars since 1918, ... By declaring bankruptcy, Hertz says it intends to stay in business while restructuring its debts and emerging a financially healthier company.

Hertz said the bankruptcy process will give it "a more robust financial structure that best positions the company for the future as it navigates what could be a prolonged travel and overall global economic recovery."

The company had a total of 568,000 vehicles and 12,400 corporate and franchise locations worldwide at the start of this year. About a third of those locations are at airports.

Hertz had $18.8 billion of debt on its books as of March 31, up $1.7 billion from the end of last year. Most of that debt, $14.4 billion, is backed by its vehicles. That includes the debt for which it missed the payment in April the prompted this latest crisis. It had only $1 billion in cash on its balance sheet as of the end of March,
https://edition.cnn.com/2020/05/22/business/hertz-bankruptcy/index.html

Disclaimer: I bought some today and I am not a pro