Hertz Global Holdings Inc. has filed for Chapter 11 bankruptcy because of the COVID-19 pandemic’s serious effects on its operations. Hertz may restructure its debts and carry on business as usual thanks to the Chapter 11 filing while it looks for a buyer or a new financing arrangement. This action was taken after Hertz missed a $400 million debt payment in April, which prompted a default warning from its lenders.
A firm may file for bankruptcy under Chapter 11 and go on business while it reorganizes its debts. This means that Hertz will be allowed to keep providing car rentals to consumers while looking for a buyer or a new financing arrangement. The petition also gives Hertz the opportunity to renegotiate its leases and other agreements, which could help the business lower its costs.
Hertz operates in more than 10,000 sites globally, and its business model is primarily based on automobile rental services. The business also provides its clients with a variety of supplementary services, including insurance and roadside assistance. Customers’ rental payments and the resale of pre-owned vehicles from Hertz’s fleet provide the company with its income.
German-based Sixt Car Rental is a global auto rental firm with operations in over 100 nations. Although Hertz and Sixt are rivals in the car rental business, they are not related. Sixt is renowned for its high-end car rental services, providing clients with a selection of high-end vehicles.
Comparing Payless and Avis is not appropriate. A automobile rental firm called Payless automobile Rental is present in both the US and Canada. On the other side, Avis is a world-wide rental car firm with over 5,000 outlets. Despite the fact that both businesses provide car rental services, they are not connected.
As one of the biggest participants in the market, Hertz’s Chapter 11 filing is a significant move for the car rental sector. Hertz may now restructure its debts and carry on business as usual while looking for a buyer or a new financing arrangement according to the filing. While Payless Car Rental is not the same as Avis, Sixt Car Rental is a rival of Hertz.
Yes, Hertz and Dollar are related because their parent company, Hertz Global Holdings Inc., owns both of them.