Car-rental company Hertz files for bankruptcy
Hertz Global Holdings Inc., the US-based car rental company has filed for bankruptcy.
According to a media report, travel restrictions to contain the spread of Covid-19 and the subsequent economic collapse have killed the demand for rental cars. Mounting debt is also said to have lead to the collapse of Hertz’s rental car business.
The Chapter 11 filing allows Hertz to keep operating while it formulates a recovery plan. The company listed about $25.8 billion in assets and $24.4 billion of debts. It has also sought a bailout from the US Treasury Department. The Chapter 11 proceedings only involve the US and Canadian subsidiaries.
Hertz has a fleet of about 4 lakh cars in the US. These are not subject to repurchase agreements with vehicle manufacturers. It is believed that the liquidation of the company’s fleet could adversely affect the auto industry in general.
Hertz was founded in Chicago in 1918. Today, the company’s business is spread to 12,400 locations worldwide.
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