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Hertz Global Holdings wants to keep its business in Europe solvent as it prepares for a possible bankruptcy filing in the US, The Post has learned. The struggling car-rental giant backed by billionaire Carl Icahn on Friday asked lenders to its European division, which represents about 20 percent of sales, to sign a waiver by …
Hertz Global Holdings wants to keep its business in Europe solvent as it prepares for a possible bankruptcy filing in the US, The Post has learned.
The struggling car-rental giant backed by billionaire Carl Icahn on Friday asked lenders to its European division, which represents about 20 percent of sales, to sign a waiver by this Friday that will allow it to avoid bankruptcy, a source said.
Hertz would likely ask for such waiver only if it planned to throw the much larger US division into bankruptcy, according to sources close to the situation.
The company’s European division is stronger financially than the US arm as a larger percentage of its fleet of cars can be sold back to automakers at guaranteed prices, according to sources.
After missing a May 4 deadline to pay roughly $500 million to creditors, Hertz fought for and was granted an extension until Friday, May 22. It is seeking the waiver as it nears the second deadline at a time when the coronavirus has crushed it’s business.
“It is possible they get a few extra days [beyond Friday] to make the payment, but nothing more,” a source said.
On Monday, Hertz said Kathryn Marinello resigned as chief executive and has been replaced by Paul Stone, most recently head of the company’s North American retail operations.
Icahn, who owns 39 percent of Hertz, liked Marinello, according to sources, and it’s possible that she quit rather than being forced out. But as The Post has previously reported, Hertz under Marianello failed to financially prepare for the coronavirus, including turning down a $300-$500 million loan in March. She has agreed to be a consultant to the company for the next year.
Marinello’s departure may not be not a good sign, according to Jefferies analyst Hamzah Mazari, who notes that a recent Wharton Business School study suggests that within the US only 14 percent of CEOs stay on through bankruptcy.
“Given that only 14 percent of CEOs stay through bankruptcy and given that we only have a few days before the forbearance ends, chances of a filing are very high,” Mazari told The Post.
In morning trading, Hertz was recently down 3 percent to $3.07.
Hertz did not immediately return a call for comment.
