Carl Icahn’s car-rental company, Hertz, is gearing up for a possible bankruptcy as the coronavirus pandemic slams the brakes on its business.
The car rental company failed to make an important monthly lease payment tied to its 500,000 vehicles this month, it revealed Wednesday morning.
“While the company has taken aggressive action to eliminate costs, the company faces significant ongoing operating expenses,” including the monthly payments that allow it to lease its fleets, it said in a regulatory filing Wednesday.
Hertz has “been engaged in discussions” to reduce its lease payments, it said. But if the payments are not made by the end of a grace period on May 4, 2023, Hertz could be in trouble without an agreement from a lender, it said.
As The Post reported on April 15, Hertz faces a $1 billion-to-$1.5 billion budget shortfall tied to roughly $10 billion in financing it used to lease its fleet of 500,000 cars. The car-rental chain only has $1 billion in cash on hand to make good on that debt, according to financial records.
Icahn, who owns a 39 percent stake in Hertz, has been directly involved in talks with lenders, sources said.
“If we can’t make a deal with them, we go bankrupt,” a company insider said at the time. “It’s a coin toss whether Hertz does not go bankrupt by the summer.”
Related Post:
- Carl Icahn’s Hertz could face bankruptcy amid coronavirus woes: sources
- Why Carl Icahn’s Hertz near bankruptcy while rival Avis stays afloat
- Hertz files for bankruptcy protection amid coronavirus pandemic
- Hertz wants to cash in on surging shares amid bankruptcy
- JCPenney files for bankruptcy protection amid coronavirus woes
- Carl Icahn takes $1.8 billion loss as he dumps stake in bankrupt Hertz
- Hertz has 3 weeks to fight off bankruptcy
- Hertz wants to keep European business solvent as it eyes US bankruptcy
- Hertz seeking bankruptcy loan of up to $1B after stock sale nixed
- Hertz handed out $16 million in retention bonuses after bankruptcy filing