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Monday, 05 April 2021 16:29

Hertz Selects Equity Sponsor for Chapter 11 Exit

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...benefit all of our stakeholders. We look forward to emerging from Chapter 11 in the second quarter financially and operationally stronger, and well-positioned to achieve the opportunities in the rebounding travel market."

 

As set forth in the transaction documents, the supporting noteholders have agreed to support the exchange of the unsecured funded debt claims against the company for approximately 48.2% of the equity in the reorganized company and the right to purchase an additional $1.6 billion of equity to fund the plan.

 

The supporting noteholders have also committed to purchase, or otherwise backstop, the full $1.6 billion of equity being offered to the holders of the company's unsecured funded debt. The holders of the company's €725 million European vehicle notes will be paid in cash in full under the plan; their guaranty claims against the U.S. entities will be unimpaired and the balance of their debt will be paid by the issuer, Hertz Holdings Netherlands BV.

 

Holders of general unsecured claims will receive a cash payment estimated to provide a recovery of approximately 75%. Administrative, priority and secured claims will be paid in cash in full. In addition, the company's existing equity will be cancelled and receive no distribution.

 

The sponsorship group brings unique operational expertise as strategic partners to the company. They have extensive experience across the automotive, rental and travel sectors, including with companies such as Santander Consumer USA, Dana Incorporated and Car Trade.

 

The selection of the sponsorship group reflects the culmination of a robust competitive process and series of negotiations that began in November 2020. The company believes through this competitive process they have maximized value for all stakeholders.

 

The next step will be for the bankruptcy court to consider approving the terms of the sponsorship group's proposed investment, the disclosure statement with respect to the plan, and related creditor solicitation materials and procedures. All such matters are currently scheduled to be heard April 16.  

 

Assuming court approval, the disclosure statement and plan will then be sent to Hertz's creditors for a vote, and the court will hold a hearing to consider confirmation of the plan.

 

Source: Hertz

 

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