The Hertz saga is far from over, but it is light at the end of the tunnel because, according to Fox Business, the company has pledged $ 1.65 billion (£ 1.28 billion / € 1.41 billion) in debt financing.
While funding depends on the approval of the U.S. Bankruptcy Court for the Delaware District, the outrageous giant car has a big plan for its funding.
Up to $ 1 billion (£ 774 / € 853 million) could be used to provide equity for vehicle acquisition in the United States and Canada. Although it is strange that a bankrupt company wants to buy new vehicles, Hertz said they want to “welcome customers back with new vehicles”; when returning to pre-pandemic levels.
Also read: Hertz Files For Bankruptcy, Raises Fear It May Flood Market With Hundreds Of Thousands Of Used Cars
Buying new vehicles will also help keep Hertz competitive, while also ensuring customers return and stay happy. That was important in the long run and Hertz was recently named # 1 in JD Power’s Rental Car Customer Satisfaction, despite “very difficult and unusual times.”
A large portion of the remaining funds, up to $ 800 (£ 619 / € 683) million, will be used for working capital and general corporate purposes. Ideally it would buy the company time to wait for the coronavirus pandemic to subside and travel to return to normal.
A court hearing is scheduled for October 29 and Hertz CEO Paul Stone said: “This new financing will provide additional financial flexibility as we continue to navigate the effects of the pandemic on travel industry and take steps to properly position our business for the future. “
The news sent Hertz stock up as it closed at $ 2.50 (£ 1.94 / € 2.13) on Friday. It is true that this is only a part of the previous pre-pandemic, but it is a 142.72% one day increase.