Hertz Global Holdings Reaches Key Milestone In Restructuring, Files Plan Of Reorganization And Disclosure Statement
Hertz Global Holdings (OTCPK:HTZGQ) has filed its proposed Plan of Reorganization and related Disclosure Statement with the U.S. Bankruptcy Court, marking a significant step in its Chapter 11 process. The plan is backed by Knighthead Capital and Certares Opportunities, which will invest up to $4.2 billion. This investment, along with $1 billion in first-lien financing and $1.5 billion revolving credit, aims to strengthen Hertz's capital structure and facilitate its emergence from bankruptcy by summer 2021. The next court hearing is set for April 16.
- Proposed investment of up to $4.2 billion from Knighthead and Certares to purchase up to 100% of common stock.
- New capital structure aims to reduce corporate debt and leverage.
- Plan includes cash recovery of 70% for general unsecured creditors.
- None.
ESTERO, Fla., March 2, 2021 /PRNewswire/ -- Hertz Global Holdings, Inc. (OTCPK:HTZGQ) ("Hertz" or the "Company") today announced that it has reached a key milestone in the Company's Chapter 11 process by filing its proposed Plan of Reorganization ("Plan") and related Disclosure Statement with the U.S. Bankruptcy Court for the District of Delaware.
The proposed Plan contemplates that Knighthead Capital Management, LLC and its affiliates ("Knighthead") and Certares Opportunities LLC and its affiliates ("Certares") will serve as the Plan Sponsors and will commit to invest up to
The proposed Plan would provide for a new, sustainable capital structure that would substantially reduce Hertz's corporate debt and provide for a less leveraged vehicle debt structure. If confirmed, the proposed Plan would provide for the payment in cash in full of all of Hertz's existing first- and second-lien debt and all administrative and priority claims, including the obligations owed under Hertz's
Overall, the proposed Plan will enable Hertz to exit Chapter 11 stronger both financially and operationally.
The next step in this process is for the Bankruptcy Court to approve the terms of the Plan Sponsors' proposed investment, the Disclosure Statement and creditor solicitation materials at a hearing scheduled for April 16. Assuming Court approval, the Disclosure Statement and Plan will be mailed to Hertz's creditors for a vote and the Court will schedule a hearing to confirm the Plan. Changes may be made to the Plan and Disclosure Statement prior to final creditor and Court approval.
Paul Stone, Hertz's President and Chief Executive said, "We are excited to reach this important milestone in our restructuring process. Our Plan of Reorganization provides us a clear path forward to completing our financial restructuring and emerging from Chapter 11 by early to mid summer. The support of the Plan sponsors demonstrates their confidence in Hertz's growth potential; moreover, they bring valuable experience in the travel and leisure industry."
Stone continued, "We've been making excellent progress on our financial and operational initiatives and repositioning our business as we prepare for increased travel demand as the pandemic subsides. We're grateful for the commitment of our exceptional employees and teams around the world working tirelessly to maintain smooth operations with safe and outstanding service to our customers. We would like to thank our customers, franchise partners, vendors and other business partners for their continued support and loyalty. Based on actions we've taken during the restructuring process, we believe Hertz will be well-positioned to resume growth and secure the long-term success of our iconic brand."
Certares and Knighthead have recently formed the CK Opportunities Fund, a co-managed vehicle specifically dedicated to investments in travel and leisure. Knighthead is a leading credit-investment management firm established in 2008 with
For the Court documents or filings, please visit https://restructuring.primeclerk.com/hertz or call (877) 428-4661 (toll-free in the U.S.) or (929) 955-3421 (from outside the U.S.).
White & Case LLP is serving as legal advisor, Moelis & Co. is serving as investment banker, and FTI Consulting is serving as financial advisor.
ABOUT HERTZ
The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand. The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation owns the vehicle leasing and fleet management leader Donlen Corporation, operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of federal securities laws. Words such as "expect" and "intend" and similar expressions identify forward-looking statements, which include but are not limited to statements related to our liquidity and potential financing sources; the bankruptcy process; our ability to obtain approval from the Bankruptcy Court with respect to motions or other requests made to the Bankruptcy Court throughout the course of the Chapter 11 Cases; the effects of Chapter 11 on the interests of various constituents; and the ability to negotiate, develop, confirm and consummate a plan of reorganization. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including those in our risk factors that we identify in our most recent annual report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on February 26, 2021, and any updates thereto in the Company's quarterly reports on Form 10-Q and current reports on Form 8-K. We caution you not to place undue reliance on our forward-looking statements, which speak only as of their date, and we undertake no obligation to update this information.
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SOURCE Hertz Global Holdings, Inc.
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