Hertz Global Holdings (HTZ) - Get Hertz Global Holdings, Inc. Report shares jumped after the rental-car chain said it had obtained $1.65 billion in financing to help it emerge from bankruptcy proceedings.
The Estero, Fla., company said in a statement that it had "secured commitments for debtor-in-possession financing totaling $1.65 billion and has filed a motion for approval of the financing by the U.S. Bankruptcy Court for the District of Delaware.”
Hertz shares recently traded at $2.18, more than double their Thursday close at $1.03. The stock was off 93% year to date through Thursday, with the coronavirus pandemic pummeling the entire travel industry.
Hertz filed for Chapter 11 protection from creditors in May.
“The financing is to be provided by certain of the company's pre-petition first-lien lenders and is expected to be structured as a delayed draw term loan debtor facility,” Hertz said.
“Up to $1 billion can be used to provide equity for vehicle acquisition in the U.S. and Canada. Up to $800 million can be used for working capital and general corporate purposes.”
Chief Executive Paul Stone said the "new financing will provide additional financial flexibility as we continue to navigate the pandemic's effects on the travel industry and take steps to best position our business for the future.
“We are pleased with the strong interest from our pre-petition first-lien lenders and appreciate their support of Hertz and our future opportunities as a rental car leader."
Moelis is the company’s investment banker, FTI Consulting is Hertz's financial adviser and White & Case is legal adviser.