Hertz declares bankruptcy in the USA, demand has evaporated

Hertz Global Holdings, an American car rental company more than a hundred years old, placed itself under the protection of the American bankruptcy law after the failure of discussions with its creditors to support an activity decimated by the epidemic of coronavirus.

Hertz’s board of directors voted in favor of using “Chapter 11” in a Delaware court, according to court documents. Hertz specifies that internationally, the operational regions Europe, Australia and New Zealand are not included in the procedure initiated in the United States.

The group, whose main shareholder is the billionaire investor Carl Icahn at almost 39%, has seen rental demand evaporate because of government restrictions on travel – Hertz generates a large part of its turnover in airports – and containment orders.

With nearly $ 19 billion in debt and around 38,000 employees at the end of 2019, the company is one of the main companies victims of the epidemic that has hit the plant for several months. A cascade of bankruptcies or Chapter 11 investments has already affected distributors, restaurants and oil and gas players in the United States.

Airlines have so far escaped this fate with billions of dollars in public aid, a path that Hertz has explored but to no avail.

The group, which has about a billion dollars in cash, has been discussing with its creditors since it had defaulted on a large payment on car leases expected in April.

This month, Hertz, already weakened by competition from new rental forms such as Uber hybrid bikes, also announced its intention to cut 10,000 jobs because of the impact of the coronavirus.

(Mike Spector, Gilles Guillaume for the French service)