Hertz has chosen a new group of private equity firms in the wake of an expected recovery in world travel for the American car rental group, which filed for bankruptcy in May 2020.
Hertz said a recent proposal, led by Centerbridge Partners, Warburg Pinks and Dundon Capital Partners, to invest $ 2.5 billion in the restructured group, Business is moving forward and Chapter 11 will be released. “
In early March, Hertz chose a proposal from private equity firms Knighthead Capital and Sartres Opportunities LLC, where the companies agreed to invest a similar multi-billion dollar investment in the Florida-based firm.
Just last week, the Centerbridge-led group released details of its rival restructuring plans. Both bidding groups agreed to pay secured creditors cash that left about 3 billion in unsecured bondholders in the current debt-ridden constituency to win.
According to documents filed in bankruptcy court last week, the Centerbridge plan estimates that unsecured bondholders will recover 75 cents on its terms, five percent less than the Knighthead plan.
The Centerbridge offer, however, included giving at least 46 percent of the new Hertz equity to unsecured Hertz bondholders, a higher ratio than the Knighthead offer, increasing the potential side-up opportunities for bondholders. According to court documents, the major bondholders include Fidelity, JP Morgan and Canada’s Kanso Investment Council.
Hertz unsecured bonds traded down nearly 100 cents from trading below 10 cents on the dollar when it went bankrupt in May.
On Saturday, Hertz said 85 percent of the unsecured bond defaulters group supported the Centerbridge plan, saying “the level of support for itor defaulters for the sponsorship group’s proposal has given it a clear advantage.”
Hertz filed for bankruptcy last spring after the price of used cars plummeted into the depths of the highway, forcing resource-backed donors to pay cash to those who relied on vehicle purchases. However, after the gradual start of travel and the increase in vaccine intake, travel and hospitality organizations have rallied sharply. Hertz rival Avis saw a rally from around এখন 10 a year ago to এখন 70 now.
Both the Centerbridge and Knighthead plans called on current equity holders to liquidate their shares. Last summer, Hertz tried to sell new shares on its bankruptcy financing because retailers using the Robinhood trading app placed bets on the company. The bankruptcy court approved the sale of such shares, but concerns from the Securities and Exchange Commission ultimately prevented Hertz from proceeding.
Representatives from Hertz, Knighthead and Centerbridge did not immediately respond to requests for comment.
Hertz has a market capitalization of about $ 300 million. A group of Hajj fundraisers announced this week that they have formed a committee to press for shareholders ’demands. According to someone familiar with their plan, the committee wanted to consolidate its own restructuring proposal because it believed that Hertz’s publicly shared financial forecast meant that there was enough future value in not restructuring existing shareholders.
If the bankruptcy court approves the Centerbridge plan, the defaulters will vote to approve it. Hertz said it expects to go bankrupt in June.