Hertz bankruptcy exit completed; new board installed

ESTERO, Florida –

It might be hard to blame the executives of Hertz Global Holdings and the new board members if they were to shoot fireworks before the July 4 vacation.

This week, Hertz announced that it has successfully completed its Chapter 11 restructuring process and has become a “financially and operationally stronger company that is well positioned for the future,” as a new board of directors from eight members take the leadership.

The company said its reorganization plan was upheld by the federal bankruptcy court on June 10, 2021. In doing so, Hertz pointed out in a press release that Judge Mary Walrath described the result as a “fantastic result” which “exceeds any outcome that I” I have seen in any Chapter 11 case that I have faced in my 20+ years.

With more than $ 5.9 billion in new equity provided by Hertz’s new investor group led by Knighthead Capital Management, Certares Opportunities and some funds managed by subsidiaries of Apollo Capital Management, Hertz noted that it had reduced its corporate debt by nearly 80% and significantly improved its liquidity to fund operations and future growth.

Specifically, Hertz said it has eliminated nearly $ 5.0 billion in debt, including all of Hertz Europe’s corporate debt.

In addition, Hertz said it emerged with a new $ 2.8 billion exit credit facility (including an unused $ 1.3 billion revolving credit facility) and a $ 1.3 billion credit facility. $ 7.0 billion asset-backed vehicles, each with terms the company considers “extremely favorable.”

The overall interest rate on the company’s new ABS financing is less than 2.0%, according to the press release.

Henry Keizer, outgoing chairman of the board of Hertz, offered this assessment of the car rental company’s journey at this point.

“In the face of the epic and unprecedented challenges presented by the COVID-19 pandemic, and unfazed by the first changes in leadership, we have remained focused on stabilizing the business and seizing opportunities to mitigate losses and create new value for our stakeholders, ”Keizer said in the press release. .

“When the economy started showing signs of recovery earlier this year, we were perfectly positioned to drive a competitive process that would maximize recoveries. The result – paying off all of our nearly $ 19 billion in creditors and returning substantial value to our shareholders – is remarkable, ”he continued.

Along with its financial restructuring, Hertz recalled that it had also executed a series of operational initiatives to create a “more focused and profitable business”.

Among these actions, Hertz noted that it:

– Launch of a cost reduction program that generates significant savings

– Adjusted its fleet in its American and international activities

– Optimized its localization footprint

– Negotiation of cost reductions and concessions on certain airport sites

– Completed the sale of its fleet rental business in Donlen for $ 891 million in cash.

In addition, Hertz went on to mention that it is focusing on changing demand through its portfolio of neighborhood rental locations to complement its airport business.

These efforts, combined with a sharp increase in car rentals in the United States and continued strength in used vehicle sales, put the company on track to achieve strong financial results in 2021, according to the president and Hertz CEO Paul Stone.

“Today marks a milestone in Hertz’s 103-year history,” Stone said in the press release released Wednesday. “Thanks to the tireless efforts of our Board of Directors and our team, we move forward in an incredibly strong position with an exciting road ahead of us.

“Now, with a strong financial base, a leaner and more efficient operating model and plenty of cash to invest in our business, Hertz has exceptional potential to generate profitable long-term growth,” he said. he continued. “In the United States and around the world, we are ready to capitalize on our industry leadership, deep operational expertise and our iconic global brand.

“I am extremely proud of all that we have accomplished and believe this is only the beginning of delivering even more value to our stakeholders,” continued Stone. “Thank you to the Hertz team around the world and the Board of Directors, to our new group of investors, who bring extensive industry experience, and to our customers, franchisees, partners and shareholders for your trust and support. throughout this process.

“We look forward to a bright future as a dynamic part of the growing travel industry and as a trusted partner for the mobility needs of our customers,” he added.

Hertz filed for Chapter 11 operations in the United States on May 22, 2020 following the onset of the COVID-19 pandemic, which had a severe and dramatic effect on travel demand.

Hertz pointed out that its major international operating regions, including Europe, Australia and New Zealand, were not included in the US Chapter 11 proceedings.

As a result of its successful restructuring process, Hertz said its creditors would receive full cash payment and existing shareholders would receive more than $ 1 billion in value.

The company said Hertz’s common stock will continue to be listed on the over-the-counter (OTC) market, until the company is re-listed on a national stock exchange.

Effective Thursday, the new ticker symbols are HTZZ for Hertz common stock and HTZZW for warrants.

White & Case LLP acts as legal advisor, Moelis & Co. as investment banker and FTI Consulting as financial advisor.

For court documents or filings, visit https://restructuring.primeclerk.com/hertz or call (877) 428-4661 or (929) 955-3421.

Hertz forms new board of directors

Now that the bankruptcy exit is complete, Hertz has also highlighted its new eight-member board with up to three additional directors to be appointed in the future. With Stone, the group currently includes:

– Certares founder Michael Gregory O’Hara, who has been appointed chairman

– Thomas Wagner, co-founder of Knighthead Capital, who has been chosen as vice-chairman

– Colin Farmer, Senior Managing Director of Certares

– Andrew Shannahan, Knighthead partner

– Partner of Apollo Christopher Lahoud

– Senior advisor to TPG Capital and former CEO of Ford Mark Fields

—Former member of the board of directors of Hertz Vincent Intrieri

“We are delighted to welcome our new board members and benefit from their collective expertise, leadership and oversight at this pivotal time for Hertz and the travel industry,” Stone said in a statement. separate press release. “These leaders bring extensive financial, operational and market experience that will be invaluable in the next chapter for Hertz.

“I would also like to express our company’s gratitude to our outgoing board members for their service and tireless efforts, especially throughout the last year and a half of the pandemic and our successful restructuring,” said added Stone.

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