Hertz filed for bankruptcy protection Friday, unable to withstand the coronavirus pandemic that has crippled global travel and with it, the heavily indebted 102-year-old car rental company’s business.

Shares in troubled car rental company Hertz Global Holdings (HTZ) sunk a further 11% to $1.16 in Wednesday’s after-hours trading on the news that Carl Icahn has sold his Hertz stake at an apparent loss of about $1.8 billion.Icahn divested 55.34M common shares for $39.8M, at a price of $0.72/ share on May 26, an SEC filing revealed. He previously owned a 39% stake in Hertz and had three representatives on the board.The 84-year old hedge fund manager stated “I have been an investor and supporter of Hertz since 2014.  Unfortunately because of Covid-19 which has caused an extremely rapid and substantial decrease in travel, Hertz has encountered major financial difficulties and I support the Board in their conclusion to file for bankruptcy protection.”“Yesterday I sold my equity position at a significant loss, but this does not mean that I don’t continue to have faith in the future of Hertz.  I believe that based on a plan of reorganization that includes new capital, Hertz will again become a great company.  I intend to closely follow the Company’s reorganization and I look forward to assessing different opportunities to support Hertz in the future.”Late on Friday Hertz filed for bankruptcy protection after the car rental firm failed to reach long-term agreements with creditors. The news sent shares down 36% to $1.82 in extended US trading.Hertz is embarking on the financial reorganization as it sees “a prolonged travel and overall global economic recovery”. During the reorganization process, the company will maintain ordinary operations, continue to pay vendors and suppliers, pay its employees, and continue with its customer loyalty programs.TipRanks data shows that three analysts in the past three months have cut Hertz stock to Sell from Hold, with a further analyst downgrading the stock to Hold. Overall, this gives Hertz a bearish Moderate Sell analyst consensus.With shares trading down 92% on a year-to-date basis, the $3.33 average analyst price target indicates 154% upside potential from the current share price. (See Hertz stock analysis on TipRanks).Related News: Beleaguered Hertz Sinks 36% In After-Market On Bankruptcy Protection Filing Carl Icahn Initiates Position in Delek US Holdings, Boosts Occidental Petroleum Uber In Partnership With MoneyGram For Driver Discount During Pandemic More recent articles from Smarter Analyst: * Apple Snaps Up AI Startup Inductiv, As Analysts Boost PTs On Store Reopenings * Microsoft Seeks $2B Stake In India’s Jio Platforms- Report * Boeing Cuts 6,770 Jobs In U.S.; CFRA Upgrades Stock To Buy   * Google Faces Arizona Lawsuit Over ‘Unfair’ Location Data Storing

With the travel industry slammed to a standstill amid the pandemic, Hertz’s revenue streams vanished nearly overnight.

Hertz Global Holdings, Inc., (NYSE: HTZ) today announced that its Board of Directors has named Paul Stone President and Chief Executive Officer, effective immediately. Stone, most recently Hertz's Executive Vice President and Chief Retail Operations Officer, North America, also has been elected to the Hertz Board of Directors. Stone succeeds Kathryn V. Marinello, who plans to continue with the Company in a consulting position for up to one year to support a smooth transition.

Shares of Hertz Global Holdings Inc. fell more than 30% in the extended session Friday after The Wall Street Journal reported the car-rental company's bankruptcy could come as early as Friday night. Hertz has failed to reach a deal with top lenders, the newspaper reported, citing people familiar with the matter. Nationwide restrictions on travel put in place to curb the spread of the coronavirus have hit Hertz and other travel-and tourism-related businesses hard, and Hertz has missed debt payments and reportedly had hired advisers to try to negotiate its debt. Shares of Hertz ended the regular trading day down 7.5%.

The global case tally from the coronavirus that causes COVID-19 climbed above 5.5 million on Tuesday, as the World Health Organization warned of the possibility of an immediate “second peak” in infections from the current wave, if countries and local governments ease measures to contain the spread too soon.

Hertz Global Holdings, Inc. (NYSE: HTZ) ("Hertz" or the "Company") today announced it and certain of its U.S. and Canadian subsidiaries have filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.

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Hertz Global Holdings (HTZ) late on Friday filed for bankruptcy protection after the car rental firm failed to reach long-term agreements with creditors as it grapples with the financial fallout induced by the coronavirus pandemic.The news sent shares down 36% to $1.82 in extended U.S. trading on Friday. The company, whose largest shareholder is billionaire investor Carl Icahn with an almost 39% stake, said that the lockdown orders tied to the virus pandemic fueled an increase in car rental cancellations and a decline in future bookings.Hertz said it had more than $1 billion in cash on hand to support its ongoing operations. The company may seek additional cash, including through new borrowings, depending upon the length of the COVID-19 induced crisis and its impact on revenue.“The impact of COVID-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company's revenue and future bookings. Hertz took immediate actions to prioritize the health and safety of employees and customers, eliminate all non-essential spending and preserve liquidity,” the company said in a statement. “However, uncertainty remains as to when revenue will return and when the used-car market will fully re-open for sales.”Hertz is embarking on the financial reorganization as it sees “a prolonged travel and overall global economic recovery”. During the reorganization process, the company will maintain ordinary operations, continue to pay vendors and suppliers, pay its employees, and continue with its customer loyalty programs.The car rental company said that its principal international operating regions including Europe, Australia and New Zealand are not included in the U.S. Chapter 11 proceedings. In addition, Hertz’s franchised locations, which are not owned by the company, also are not included in the bankruptcy proceedings.Earlier this month, the ailing car rental firm reported disappointing first quarter earning results with Q1 Non-GAAP EPS of -$1.78 missing Street expectations by $0.59. Meanwhile revenue of $1.92B dropped 9% year-over-year and fell short of consensus estimates by $70M.On May 16, Hertz announced that its Executive VP Paul Stone will replace Kathryn Marinello as CEO.Following the announcement, Deutsche Bank’s Chris Woronka wrote: “In his most recent role, Stone's oversight included the company's TNC business, as well as its expanded retail operations (which had been a key driver of significantly reduced fleet costs throughout 2018 and 2019 but quickly became a headwind earlier this year).”“We see both of these units as being key to the company's ability to return to profitability in a more normalized economic environment,” Woronka added.The analyst reiterated his Hold rating on the stock with a $3 price target. TipRanks data shows that three analysts in the past three months, have cut Hertz stock to Sell from Hold, with a further analyst downgrading the stock to Hold. Overall, this gives Hertz a bearish Moderate Sell analyst consensus.With shares trading down 82% on a year-to-date basis, the $6.75 average analyst price target indicates 138% upside potential from the current share price.(See Hertz stock analysis on TipRanks).Related News: Foot Locker Earnings Miss On All Counts; Stock Down 6% In Pre-Market Nvidia Sinks Despite Stellar Earnings; Top Analyst Says Buy On Any Weakness Starbucks Regains Almost Two-Thirds Of U.S. Same-Store Sales As Stores Reopen More recent articles from Smarter Analyst: * Apple Snaps Up AI Startup Inductiv, As Analysts Boost PTs On Store Reopenings * Microsoft Seeks $2B Stake In India’s Jio Platforms- Report * Boeing Cuts 6,770 Jobs In U.S.; CFRA Upgrades Stock To Buy   * Google Faces Arizona Lawsuit Over ‘Unfair’ Location Data Storing

(Bloomberg Opinion) -- From the customer’s perspective, car rental is a straightforward business. The only uncertainty is whether the hire company will charge you for the scratch they discover when you hand back the vehicle. Hertz Global Holdings Inc.’s bankruptcy protection filing on Friday was a reminder that today even the simplest business models are underpinned by a lot more financial complexity than meets the eye. Rather than make the rental giant more robust, financial engineering seems to have made Hertz more brittle.  The proximate cause of Hertz’s demise was of course the sudden collapse in bookings caused by coronavirus travel restrictions. The company’s monthly revenue  fell 73% year-on-year in April, a shortfall that even the most resilient companies would struggle to withstand for long.But Hertz’s complicated financial plumbing contributed to it becoming one of the most high-profile companies to seek protection from creditors during the corona crisis. This byzantine organizational chart from the bankruptcy filing gives you just a taste of what lies underneath the company’s hood:In the decade preceding its collapse, Hertz took on too much debt, participated in overpriced M&A and was accused of playing accounting games to pad its earnings. (For more, read this colorful account from Bloomberg’s David Welch.)So when disaster struck and a request for a government bailout was rejected (rightly in my view considering top shareholder Carl Icahn is worth some $18 billion), Hertz was already standing far too close to the precipice. Regrettably Covid-19 will probably expose more of this type of corporate frailty, both in America and around the world.Hertz’s debt binge began when it was acquired by private equity firms from Ford Motor Co. in 2005; the new owners quickly took out a $1 billion dividend. Piling on debt juiced the potential returns for the owners and helped pay the inflated $2.3 billion price tag for the Dollar and Thrifty brands in 2012, which Hertz struggled to integrate.Hertz was only able to amass an eye-watering total of $19 billion in borrowings thanks to a massive program of asset-backed lending, which became its primary source of capital.(2)Special-purpose financial entities purchase cars on Hertz’s behalf, and investors in the asset-backed securities make a return via the lease payments that Hertz is obliged to stump up. Put another way, Hertz leases cars long term from the financing subsidiary — typically for about 18 months in the U.S. — and then rents them out to customers for shorter periods.In theory, this is a stable and low-cost way for a risky borrower such as Hertz to fund the large capital outlays needed to keep its fleet looking fresh. Hertz’s corporate credit has been rated junk for the past decade but many of the asset-backed securities it issued were triple-A rated, at least until recently. However, economic shutdowns stemming from efforts to curb the new coronavirus suddenly threw a lot of sand in Hertz’s gears: The resale value of its vehicles fleet fell sharply, requiring the company to inject more cash into the financing structure.With only about $1 billion of cash on its books, Hertz was ill-placed to fund that collateral call, and the pandemic meant it wasn’t able to sell vehicles to generate cash because potential buyers were confined to their homes and auctions and dealerships were closed. (Hertz’s chief financial officer describes these acute pressures in this filing.) Asset-backed securities holders appear to have decided that allowing Hertz to fall into bankruptcy will prove no impediment to them getting most of their money back, at least for those holding the better-rated tranches of debt. The same can’t be said, however, for Hertz’s unsecured lenders, or its shareholders. Building a 39% stake since 2014 probably cost Icahn about $1.6 billion, based on a Bloomberg average share-cost estimate, but he now risks being wiped out.   Hertz’s predicament was made more severe because in the U.S. it couldn’t hand back most of its surplus vehicles to the manufacturer, as is common practice in Europe. Instead it faced the task of selling them itself and bore the risk of any unexpected depreciation. The company is one of the 10 largest sellers of used vehicles in the U.S.The preponderance of these so-called “risk vehicles” in its half-a-million strong U.S. car fleet has increased since 2014 because it was more profitable than paying a premium to the manufacturer to guarantee a fixed repurchase price. There’s no reward without risk, though, as Hertz’s bankruptcy filing made abundantly clear. Having lost money in three of the past four years, Hertz did seem to have turned a corner lately: It raised capital to pay down debt last year and was ranked No. 1 for customer satisfaction in J.D. Power’s North American car rental rankings. Not that customers have much choice. Consolidation has given just three groups — Hertz, Enterprise Holdings Inc. (owner of the National and Alamo brands) and Avis Budget Group Inc. — control of almost the entire U.S. market for airport car rentals in the U.S.New competition from ride-hailing companies and a litany of management missteps meant Hertz never achieved the pricing power that Icahn and other recent investors probably assumed would come from all that merger activity. Because the industry’s fortunes are so closely tied to air and business travel, car rental demand is likely to remain weak for a while.  Still, Hertz remains open for business and thanks to the more lenient Chapter 11 process it should get another chance to make a success of that oligopoly, albeit as a smaller company with different shareholders and a new capital structure. Next time you return a rental car, expect the attendant to check even more thoroughly for dents and scratches.  (1) $14.7 billion of Hertz's debt relates to vehicle financingThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

The more than a century old car rental firm Hertz Global Holdings Inc filed for bankruptcy protection on Friday after its business all but vanished during the coronavirus pandemic and talks with creditors failed to result in needed relief. Hertz said in a U.S. court filing on Friday that it voluntarily filed for Chapter 11 reorganization. A large portion of Hertz's revenue comes from car rentals at airports, which have all but evaporated as potential customers eschew plane travel.

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Entities controlled by Carl Icahn have sold all 55.3 million Hertz shares they owned for $39.8 million. Icahn had paid a total of $1.88 billion for the stock of the embattled car-rental firm.

World shares forged ahead on Tuesday and commodity markets drove higher as well, as investors shrugged off Sino-U.S. tensions to focus on more stimulus in China and a re-opening world economy. Britain's FTSE and Japan's Nikkei led their regions with 1.2% and 2.2% gains, while the S&P 500 was preparing to go above 3,000 points for the first time since early March, when the economic impact of the coronavirus was just becoming clear.

Hertz and LATAM became the latest companies that have been hit hard by the coronavirus crisis. Yahoo Finance’s Tom Belger weighs in on how the companies are faring.

U.S. car rental company Hertz Global Holdings said on Tuesday it has paid about $16.2 million in retention bonuses to a range of key executives at the director level and above, days after the company filed for bankruptcy protection. The company paid President and Chief Executive Officer Paul Stone $700,000, and Executive Vice President and Chief Financial Officer Jamere Jackson $600,000 as retention bonuses, Hertz said in a filing to the U.S. regulators. Last week, the board of the company, which counts billionaire investor Carl Icahn as its largest shareholder with a nearly 39% stake, allowed it to seek chapter 11 protection in a U.S. bankruptcy court in Delaware.

Shares of Hertz Global Holdings Inc. more than doubled on heavy volume Wednesday, but retraced only a fraction of what they lost after the car rental company declared bankruptcy ahead of the long weekend.

Hertz Global Holdings Inc. said Monday it has named Paul Stone as chief executive with immediate effect, replacing Kathryn Marinello, who is resigning as CEO, president and member of the board. The troubled car-rental company said Stone was most recently executive vice president and chief retail operations officer. Marinello will remain with the company in a consulting position for up to one year. Stone came to Hertz after stints with Sam's Club/Walmart . Hertz shares tumbled to their lowest-ever close last Tuesday after the company issued a "going concern" warning, to go along with its disappointing first-quarter results and as a deadline to negotiate debt relief with its lenders was approaching. The company has been slammed by the coronavirus pandemic, which has curbed driving as customers comply with stay-at-home orders around the world. Shares soared 18% premarket, but are down 80% in the year to date, while the S&P 500 has fallen 11%.

World shares forged ahead on Tuesday and commodity markets drove higher as well, as investors disregarded Sino-U.S. tensions to focus on more stimulus in China and a re-opening world economy. Britain's FTSE and Japan's Nikkei led their regions with 2.2% gains, while U.S. S&P 500 futures cleared the 3,000 level for the first time since early March, when the economic impact of the coronavirus was just becoming clear.