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Rental company Hertz files for US bankruptcy as debts skyrocket in lockdown

Extra.ie logo Extra.ie 23/05/2020 Graham McGrath
a group of people standing in front of a store © Provided by Extra.ie

Car rental company Hertz has filed for bankruptcy as its debts skyrocketed during the lockdown period across the world.

The company closed a number of its outlets across Ireland and the UK when COVID-19 struck, although they had been given essential business status.

The company had in recent weeks announced 12,000 job losses and it had placed 4,000 staff on furlough across the world as a result of the impact on its business.

a black and yellow car in a parking lot: Car rental company Hertz has filed for bankruptcy as its debts skyrocketed during the lockdown period across the world. Pic: Shutterstock © Provided by Extra.ie Car rental company Hertz has filed for bankruptcy as its debts skyrocketed during the lockdown period across the world. Pic: Shutterstock

New court documents now reveal that the company has filed for bankruptcy in the US and Canada as it racked up over €17 billion in debt.

It had begun to miss its debt repayments in April following lockdown procedures in March and in its filing the company said it had just over €1 billion in cash.

As part of its chapter 11 filing, those who are owed money by the company will have to settle for less than the full amount of the money that they were owed.

The company said: ‘The impact of COVID-19 on travel demand was sudden and dramatic, causing an abrupt decline in the Company’s revenue and future bookings.

‘Hertz took immediate actions to prioritise the health and safety of employees and customers, eliminate all non-essential spending and preserve liquidity.

‘However, uncertainty remains as to when revenue will return and when the used-car market will fully re-open for sales, which necessitated today’s action.

a group of people standing in a room: The company closed a number of its outlets across Ireland and the UK when COVID-19 struck, although they had been given essential business status. Pic: Shutterstock © Provided by Extra.ie The company closed a number of its outlets across Ireland and the UK when COVID-19 struck, although they had been given essential business status. Pic: Shutterstock

‘The financial reorganisation will provide Hertz a path toward a more robust financial structure that best positions the Company for the future as it navigates what could be a prolonged travel and overall global economic recovery.

‘Hertz’s principal international operating regions including EuropeAustralia and New Zealand are not included in today’s U.S. Chapter 11 proceedings. In addition, Hertz’s franchised locations, which are not owned by the Company, also are not included in the Chapter 11 proceedings.’

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