Sadly, Hertz has not been able to meet the payment deadline agreed with its lenders. Now, the company will be forced out of business in the US.
Hertz said of the news: “The impact of Covid-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company’s revenue and future bookings.”
The US brand of the company has about $19bn in debt.
Thankfully, the European, Australian and New Zealand operations are not affected by the filing, meaning they still remain in business.
In the US, a whopping 20,000 employees have been laid off or furloughed.
This number accounts for half of its global workforce.
Hertz closed most of it’s UK and Irish branches when COVID-19 outbreak began. That accounts for more than 400 outlets.
The company has lost all revenue by the end of March, due to lack of travel across the UK.
There have been claims the bankruptcy could affect the price of cars.
Michael Ward, an analyst at Benchmark Co. wrote: “The risk of the auto sector occurs if the creditors of the debt that is secured by the vehicles decides to liquidate the fleet to repay the bongs.”
Meaning, in layman’s terms, the used car market could be flooded if all Hertz’s cars are sold to recoup the debt.
This would drive the price of average car in the US down.
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Published at Sat, 23 May 2020 09:22:00 +0000