On 23 May 2020, Hertz Global Holdings, Inc. (OTC: HTZ) filed for bankruptcy in the United States and Canada after 102 years. The company had been struggling with high levels of debt for a long time, and it is known that Hertz has $19 billion in debt and more than 700,000 vehicles are at a standstill. Talks were held with the creditors about an extension of the moratorium, which ultimately yielded nothing. After earlier deferrals, the COVID-19 now came to an end and the curtain fell on one of the largest car rental companies in the world.

Hertz has considered several options in vain over the past month

In the meantime, Hertz Global Holdings has been looking for a suitable solution. For example, Hertz would have thought of a planned ongoing issue of $500 million in shares. This was previously evidenced by a registration with the U.S. Securities and Exchange Commission. The Wall Street Journal also reported the news based on insiders that Hertz is discussing a loan to finance its reorganization as a result of the Chapter 11 bankruptcy. Hertz previously hoped to sell shares to speculative investors for a par value of $0.01, as the share has almost quadrupled fourteen-fold since the bankruptcy petition. However, there was a risk that the share could no longer have any value at all as a result of the bankruptcy. The risk was high and has not been addressed by Hertz.

And then there were speculations about buying up the fleet.

After a month of searching for solutions there seems to be light at the end of the tunnel. Today, two used car manufacturers CarMax Inc. and AutoNation Inc. have shown interest in a large part of Hertz’ stock. It would have interest in at least 150,000 vehicles. Analysts at Jefferies have looked into the matter and are talking about an equivalent of $3 billion in cash.

As a result of this speculation, Hertz shares have risen by more than +50% today, 24 June 2020. This is mainly due to retail investors and developments of second hand car manufacturers. The trading volume amounted to 18.8 million shares, making the share the most actively traded on the NYSE.

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By Omar