A representative for Hertz declined to comment.
By the end of March, Hertz Global Holdings had racked up more than $24 billion (£19.7 billion) in debt, according to the bankruptcy filing, with only $1 billion of available cash.
Hertz has around $US19 billion in debt, including $US4.3 billion in corporate bonds and loans as well as $US14.4 billion of debt backed by their vehicles, according to The Journal. The company was unable to secure a long-term agreement.
Before, Hertz was optimistic in its narrative that time, saying that the situation was fluid and filing for bankruptcy won't be an option. But with dismal demand, an oversize fleet and plunging prices for used cars, Hertz didn't have enough liquidity to last until a market recovery.
The firm, which earns much of its income from vehicle rentals at airports, said it had been affected by the sharp downturn in global travel. But it might need to raise more, perhaps through added borrowings while the bankruptcy process moves forward.
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Hertz's worldwide operations in Europe, Australia and New Zealand as well as its franchised locations in the U.S. are not affected. "Hopefully, the restructuring expenses will not bury the company in the process".
Chapter 11 is a mechanism that allows a company that is no longer able to repay its debt to restructure itself without creditors.
The Estero, Florida-based company, which operates the Hertz, Dollar and Thrifty car-rental brands, had been holding talks with creditors after skipping significant car-lease payments due in April.
While all travel-related companies have been hurt by the pandemic, a big part of what's weighed on Hertz is its strategy of owning or leasing a large portion of its fleet outright instead of acquiring them through buyback agreements with manufacturers.
However, tides have turned and the Florida-based auto rental company has filed for bankruptcy in DE, as reported by Automotive News.