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Hertz Faces Partial Liquidation to Repay Debt Amid Coronavirus Shutdown

Hertz Global is reportedly facing a partial liquidation to repay its debt.

Hertz Global  (HTZ) - Get Hertz Global Holdings, Inc. Report is reportedly facing a partial liquidation to repay its debt as the struggling car rental giant grapples with the impact of the coronavirus economic shutdown.

Shares of the Estero, Fla., company-based were up 1.4% Wednesday to $3.00.

Hertz failed to make lease payments -- to preserve cash -- last month and a deadline on negotiations with lenders and bondholders is set to expire Friday, the Wall Street Journal reported.

The two sides are still far from a deal, the Journal said, citing people familiar with the matter, which increases the likelihood that the company will file for bankruptcy court protection.

The restructuring is expected to trigger at least a partial liquidation of the Hertz rental-car fleet, the second largest in the U.S. behind Enterprise Holdings Inc.

The company initially asked holders of some of its $14 billion in asset-backed debt to accept an indefinite delay in payments, an offer they rejected, the Journal reported.

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Hertz doesn’t own the cars, but rather essentially leases them from banks and bond funds that bought asset-backed bonds and loans used to purchase the vehicles.

The company has said that as a result of the pandemic Hertz and its subsidiaries have "experienced a rapid, sudden and dramatic negative impact on their businesses."

Last week Hertz said there is "substantial doubt" that it will be able to continue as a going concern due to the impact of the coronavirus outbreak.

Earlier this month, the company hired FTI Consulting to advise it on efforts to streamline operations in advance of a possible chapter 11 filing.

In another cost-cutting move, Hertz is reportedly selling off its fleet of Z06-based 2019 Corvettes, which the commissioned as a rental-car special for its 100th birthday in late 2018, according to Car and Driver.

On Monday, the rental-car giant said it had named Paul Stone as chief executive, succeeding Kathryn Marinello, who resigned.