Hertz has 3 weeks to fight off bankruptcy

Carl Icahn’s rental car company Hertz Global Holdings has roughly three weeks to prove it can stave off bankruptcy, the company said on Tuesday.

In a regulatory filing, the car rental behemoth said lenders have given it until May 22 to develop a viable financial structure that “better reflects the economic impact of the coronavirus.” Lenders representing 60 percent of its car loans agreed to the forbearance, the filing said.

The reprieve was revealed after Hertz on Monday missed a deadline to fork over roughly $500 million tied to $13 billion in financing for its fleet of 500,000 rental cars.

“I think today’s news suggests they are trying to avoid bankruptcy,” said Jefferies analyst Hamzah Mazari. “Hertz is basically asking for a waiver so they can borrow more debt. They are trying to see if there is a fix.”

As The Post has previously reported, Hertz is required to fork over money when the collateral on its debt, in this case the cars, dips below the value of its financing. Thanks to the coronavirus, the value of used cars plummeted by 18 percent in the first two weeks of April.

Unless used car values rebound by June, Hertz could owe another $500 million next month — for a total payment of $1 billion, sources said.

The financing charges stand to plunge Hertz into bankruptcy. The company started the year with $1 billion in cash and is estimated to be burning $200 million a month at a time when the pandemic has slammed the brakes on its sales.

Hertz executives have warned lenders that they will be stuck with hundreds of thousands of cars that will be difficult to resell if it defaults, sources said.

The value of used cars is still down double digits, said Mazari.

But the good news for Hertz is that they aren’t expected to continue plunging below April lows, which could help Hertz keep its costs in check.

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