(AP) – In a deal to jettison itself from under bankruptcy protection, Hertz said Tuesday that it may sell a controlling stake in the company to two investment firms for $4.2 billion.
Knighthead Capital Management and Certares Opportunities will have the chance to buy the entire reorganized car rental company, but no less than a majority of its shares, Hertz Global Holdings Inc. said.
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Hertz was among the first major corporations to be felled by the pandemic last year as infections surged and shut down travel on a global scale for both companies and vacationers.
Hertz filed for bankruptcy protection in May 2020. Sales growth went into negative territory almost immediately, but the 100-year-old company was already experiencing some turmoil. When it entered bankruptcy protection, Hertz named its fourth chief executive in six years.
However, with the rollout of a suite of vaccines for the coronavirus, pent up wanderlust is expected to explode. Investors are pouring money into almost any company that caters to travelers. Share of major airlines are up between 20% and 40% this year. Cruise, lines, hotels and resorts are getting similar interest.
In this atmosphere, Certares and Knighthead recently formed the CK Opportunities Fund, which concentrates on investments in travel and leisure.
Hertz, based in Estero, Florida, said the proposed investment, combined with a new $1 billion first-lien financing, a new $1.5 billion revolving credit facility, and a new asset-backed securitization facility to finance its U.S. vehicle fleet, will provide the funding needed for the company to complete its restructuring and emerge from Chapter 11 bankruptcy protection in early to mid summer.
The proposed plan still needs court approval. A hearing is set for April 16.