Virus-hit Hertz declares bankruptcy in US and Canada
WASHINGTON, (AFP):- The car rental company Hertz, hard hit by the global coronavirus pandemic, has filed for bankruptcy in the United States and Canada, it announced Friday.
“The impact of COVID-19 on travel demand was sudden and dramatic, causing an abrupt decline in the Company’s revenue and future bookings,” Hertz said in a press release.
Hertz said it took “immediate action” to prioritize the health and safety of employees and customers and eliminate “all non-essential spending”.
“However, uncertainty remains as to when revenue will return and when the used-car market will fully re-open for sales, which necessitated today’s action,” it said.
Its main international operating regions, including Europe, Australia and New Zealand, were not included in the US Chapter 11 filing.
Hertz had cut 10,000 jobs in North America, or 26.3 percent of its global workforce, by April 21 to save money after the coronavirus shutdowns paralysed travel and crippled the economy.
Chapter 11 is a mechanism that allows a company that is no longer able to repay its debt to restructure itself without creditors.
“The financial reorganization will provide Hertz a path toward a more robust financial structure that best positions the Company for the future as it navigates what could be a prolonged travel and overall global economic recovery,” the Hertz statement said.
Hertz’ franchise sites, which are not owned by the company, are also not included in the Chapter 11 proceeding.
Published Date: Friday, May 22nd, 2020 | 10:33 PM