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Car rental company Hertz has filed for bankruptcy in the United States after failing to reach an agreement with its major creditors, the company said in a statement.
"The impact of COVID-19 on travel demand was sudden and dramatic, causing an abrupt decline in company revenue and future bookings," said Hertz, which also operates subsidiaries Dollar and Thrifty.
The bankruptcy affects the operations of Hertz and its subsidiaries in the United States and Canada, but not in Europe or Oceania , nor those that operate as franchises. The company also reported that it will remain open to the public while it is restructuring.
Hertz, founded in 1918, thus became the latest and highest profile victim of the pandemic that has also forced bankruptcy on retailers JCPenney, Neiman Marcus and J.Crew, as well as oil companies Whiting Petroleum and Diamond Offshore Drilling. .
The company has been forced to resort to this extreme due to the problems it had been suffering and which intensified during the pandemic after restrictions on air and land traffic, which have decimated the car rental market.
"Bankruptcy would make Hertz one of the highest-profile corporations" in the United States to be unable to pay its creditors due to the impact of the new coronavirus pandemic, according to The Wall Street Journal .
The lenders requested compensation from the company in exchange for a new extension of the terms, but the parties did not reach an agreement, the WSJ said.
Hertz has approximately $ 19 billion in debt , comprised of $ 4.3 billion in corporate bonds and loans and $ 14.4 billion in vehicle-backed debt.
On May 12, the specialized channel CNBC assured that concerns about Hertz's ability to meet the payment of its obligations had increased, especially after it announced that its creditors gave it until this Friday to launch a plan to refinance the debt and avoid filing for bankruptcy.
The company, based in The Estero, in the state of Florida , and whose main shareholder is the company Carl Icahn, which owns 38.94% of the shares, announced on March 11 that it was in contact with its shareholders and directors to develop a financing strategy.
The WSJ and New York Times note that Hertz has spent years trying to restructure his business and competing with similar companies like Enterprise Holdings or Avis, as well as chauffeured car rental companies like Uber or Lyft.
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