Hertz is preparing for a potential bankruptcy filing, The Wall
Street Journal reported Wednesday.The situation is fluid, sources told
the paper, as the company hopes to reduce lease payments by May 4.The
company laid off 10,000 employees — more than a quarter of its total
workforce — in April.Visit Business Insider's homepage for more
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Car-rental company Hertz is preparing for a potential bankruptcy
filing, The Wall Street Journal reported Wednesday, as the coronavirus
pandemic brings nearly all travel to a standstill.People familiar with
the matter told the paper that Hertz is working to reduce its debt
payments and is in talks on a forbearance agreement that could help it
avoid bankruptcy. The situation remains fluid, according to the
Journal's sources.Hertz did not immediately respond to a request for
comment from Business Insider. Shares of Hertz declined more than 15% in
trading Wednesday, as broader indices rose, following The Wall Street
Journal's report.
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The news of a possible bankruptcy arrives two days after Hertz on
Monday said in a regulatory filing that it “did not make certain
payments” on its operating lease as it remains in discussions with
lenders to reduce its payments. If those discussions aren't fruitful by
the first week of May, “Hertz could be materially and negatively
impacted,” it said.Earlier in April, the company laid off 10,000 workers
— about 26% of its workforce at the end of 2019 — “in an effort to
align staffing levels with travel demand.”Ryan Brinkman, an analyst at
JPMorgan, theorized on April 23 that government assistance could help
Hertz remain solvent. “We do think a potentially large amount of cash
could be made available to Hertz from the federal government,
potentially solving any liquidity concerns, although we are also
uncertain with regard to the terms,” he said in a note to clients.if you
want know more,
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