Car-rental company Hertz files for bankruptcy

New vehicle sales plummeted a whopping 98.4% for A

The filing excludes Hertz's global operating regions in Europe, Australia and New Zealand, as well as its more than 10,000 franchised locations.

With almost US$19 billion (S$27 billion) of debt and roughly 38,000 employees worldwide as of the end of a year ago, Hertz is among the largest companies to be undone by the pandemic.

The company, which operates the Hertz, Dollar and Thrifty car-rental brands, had been holding talks with creditors after missing significant car-lease payments in April. Hertz has also been plagued by management upheaval, naming its fourth CEO in six years on May 18.

"There's only so long that companies' reserves will carry them".

Hertz has halted about 90% of its new vehicle orders for 2021, a move that could pinch automakers as the vehicle rental segment typically brings about 10% of auto sales for the year.

A large portion of Hertz's revenue comes from vehicle rentals at airports, which have all but evaporated as potential customers eschew plane travel. Jacobs sold the company, initially called Rent-A-Car Inc., to John D. Hertz in 1923.

"Hertz has over a century of industry leadership", said Hertz President and CEO Paul Stone, who says the company entered 2020 with strong momentum.

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Despite the bankruptcy filing, it's business as usual as Hertz and its subsidiaries remain open.

Icahn's holding company is Hertz's largest shareholder, with a 38.9% stake in the company, according to FactSet.

Deutsche Bank analyst Chris Woronka credited Marinello with reigniting Hertz's revenue growth, writing in a note to investors that it rose 16% in 2018 and 2019 combined. The company announced on Friday that it had filed for bankruptcy protection in the United States while it restructures its debts.

Under a Chapter 11 restructuring, creditors will have to settle for less than full repayment.

Hertz has filed for bankruptcy after being dealt a devastating blow by the coronavirus.

Big-name corporations such as Neiman Marcus and J. Crew are among the victims, with airlines and other services connected to travel and tourism facing similar fates.

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