Hertz Global Holdings, which in addition to its own rental car brand includes the Dollar and Thrifty brands, said on Friday it has reached an interim $650-million deal with its lenders to resolve a bankruptcy court fight over the company’s plan to reduce its leased fleet of rental cars. According to reports, the deal will cut the debt Hertz owes lenders who financed its rental car fleet by $6 billion by Dec. 31, falling to less than $5 billion from $11 billion.
Under the agreement, Hertz will pay $650 million in cash in equal monthly installments from July to December. The car rental company will also dispose of at least 182,521 leased vehicles between June and December. Hertz has listed large numbers of vehicles for sale on its website, many at very attractive prices in an effort to greatly reduce inventory.
Hertz had filed for bankruptcy in May after its business was decimated by the coronavirus outbreak and talks with its lenders failed to result in much-needed relief.
This report includes material from Reuters.