Hertz chooses new favorites to avoid bankruptcy

Hertz chooses new favorites to avoid bankruptcy

Despite the selection of Knighthead and Certares as the leading bidders, the competition that has raged for weeks for control of Hertz isn’t over. Dundon Capital Partners LLC, Centerbridge Partners LP and Warburg Pincus LLC, which have also banded together to bid for Hertz and were previously tapped as chapter 11 plan sponsors, have the chance to come back in coming days with a counteroffer. Ticker Security Last Change Change % HTZGQ HERTZ GLOBAL 3.06 -0.16 -4.97% Any restructuring deal requires Hertz’s support and the approval of the judge overseeing its chapter 11 proceedings in the U.S. Bankruptcy Court in Wilmington, Del.

The decision makes Knighthead, Certares and other investors the front-runners to take control of Hertz out of bankruptcy with the U.S. travel industry on an upswing, thanks to expanding vaccination against Covid-19 and pent-up demand among vacationers. GET FOX BUSINESS ON THE GO BY CLICKING HERE

A Hertz representative didn’t immediately respond to a request for comment Tuesday. Hertz board members decided the restructuring bid from Knighthead and Certares is superior to a competing proposal the rental-car company previously accepted from a rival consortium of private-equity investors, according to people familiar with the matter.

BANKRUPT HERTZ SEEKS $5.4M IN EXECUTIVE BONUSES The new leading bid values Hertz at roughly $6.2 billion and provides distributions to current stockholders—a relative rarity in corporate bankruptcies, which usually don’t generate enough value to retire the debt, let alone include a recovery for equity. But hopes for a return to normal conditions, financial maneuvers during the bankruptcy and signs of a rebound in business and leisure travel have Hertz poised to exit chapter 11 protection around the end of June.

Hertz was on the ropes at the start of the pandemic, weighed down with debt, barely in operation due to travel restrictions, and facing an uncertain future. BANKRUPT CAR RENTAL FIRM HERTZ GETS $1.65B LIFELINE, STOCK SOARING

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