Car-rental company lists profit, but also ‘substantial’ debt
Car-rental company Hertz Global Holdings Inc. is seeking to list its shares on the Nasdaq under its old symbol HTZ, planning an offering with shares to be sold by some of its stockholders.
Hertz HTZZ, -3.67% shares have traded over the counter since they were delisted by the New York Stock Exchange a year ago following Hertz’s bankruptcy. The company listed a profit for the first six months of the year, but also more than $8 billion in debt.
The car-rental company filed for chapter 11 in May 2020, drowning in nearly $20 billion in debt and hit hard by travel restrictions put in place to curb the spread of COVID-19 at the time.
Hertz then embarked on a controversial plan to sell shares shortly after having filed for bankruptcy protection, warning investors that the shares in the offering could end up being “worthless” amid the bankruptcy proceedings. The sale was eventually scrapped after an outcry from regulators and investors.
Hertz emerged from bankruptcy in July, saying it was a “much stronger” company ready to capitalize on the summer’s travel rebound and skyrocketing car-rental prices amid a scarcity of rentals.
In a filing Friday, Hertz said that the terms of the offering have not yet been determined. The offering is expected for the fourth quarter, “subject to market conditions and completion of any regulatory review.”
Goldman Sachs and JPMorgan are among the lead bookrunners for the proposed offering.
In the filing, Hertz listed revenue of $3.2 billion in the six months ended in June of this year, compared with revenues of $2.8 billion in year-ago period.
It said it earned $21 million, or 13 cents a share, in that time span, contrasting with a loss of $1.2 billion, or $8.39 a share, a year ago.
“We recently emerged from bankruptcy, which could adversely affect our business and relationships” as well as ability to attract and retain employees, among other difficulties, Hertz said in the prospectus.
The company still has a “substantial amount of debt,” it said. As of June 30, Hertz owed $8.6 billion, including $7.04 billion in vehicle-related debt.
“Our substantial level of indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness,” Hertz said.
The company also warned it does not expect to pay dividends “for the foreseeable future.”