The Largest Car Rental Company in the World Went Bankrupt
By Marko Vidrih on The Capital
The coronavirus crisis led to bankruptcy of the world’s largest car rental company — the American Hertz, the Wall Street Journal reported.
Hertz Global Holdings and its subsidiaries filed a petition for reorganization in accordance with Chapter 11 of the United States Bankruptcy Code. Chapter 11 is a mechanism that allows a company that is no longer able to pay off its debt to restructure itself without creditors.
“The impact of COVID-19 on demand was sudden and dramatic, which led to a sharp decrease in revenue and future orders for the company,” the company’s press release explained.
It is noted that the world remains uncertain about the date when the “used car market will be fully open for sales.”
The company assured that, despite the reorganization, it will continue to serve customers.
Hertz has already cut 10,000 jobs in North America, or 26.3% of workers worldwide after the pandemic paralyzed travel and crippled the global economy. According to the Wall Street Journal the company has debts of $19 billion. Almost 700 thousand of its vehicles are idle due to the coronavirus.
Hertz is a global car rental giant. It was founded in 1918. Survived the Great Depression and numerous American recessions.
Recently, the company had to fight with competitors. In 2019, Hertz suffered a loss for the fourth consecutive year.
Author: Marko Vidrih
Featured image credit: rushlane.com
