May 5 (Reuters) – Ailing car rental company Hertz Global Holdings Inc said on Tuesday that its lenders had extended the deadline for some loan repayments, giving it more time to work out a financing plan to avoid a possible bankruptcy.
The deadline has now been extended to May 22, the company said in a filing. The earlier deadline was May 4 and he was in talks with lenders after ignoring a payment that was due April 27.
Hertz said he will discuss with stakeholders to develop a strategy that takes into account the economic impact of the COVID-19 pandemic and its cash flow needs.
The Estero, Florida-based company, whose main shareholder is billionaire investor Carl Icahn with 38.9% stake as of March 11, is reeling from the impact of the health crisis on global travel.
Last month it decided to lay off 10,000 employees in its North American operations out of a workforce that totaled 38,000 at the end of 2019 and brought in restructuring experts to deal with a cash shortage that has made its $ 17 billion debt potentially unsustainable.
Hertz’s preparations for possible bankruptcy have accelerated, Reuters reported last week.
Even before the pandemic, Hertz and his peers were under financial pressure as travelers turned to ridesharing services such as Uber Technologies Inc.
“Given the impact of the global COVID-19 pandemic on the travel industry, Hertz believes it will not need to acquire new vehicles for its fleet until the end of 2020,” Hertz said on file. bit.ly/35z3q49.
“Although Hertz has taken aggressive steps to eliminate costs, it faces significant ongoing operating expenses.”
Hertz shares, which fell 22% earlier in the day after a report said the company was preparing for bankruptcy, cut some losses and fell about 14.2% in afternoon exchanges. (Reporting by Sanjana Shivdas in Bangalore; Editing by Arun Koyyur)