Hertz looks to sell $1 billion common shares in light of price jump

By Caroline Salls

Pittsburgh, June 12 – Hertz Corp. requested court approval to sell shares of Hertz Global Holdings, Inc. common stock through at-the-market transactions for a total offering price of up to $1 billion, according to a motion filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

Hertz said the sale will result in the issuance of more than 246,775,008 shares of common stock.

The shares will be sold under an agreement with Jefferies LLC.

According to the motion, Hertz Global’s common stock closed at a price of $0.56 per share on May 26, the first trading day after the Hertz debtors filed bankruptcy. However, over the next two weeks, Hertz’s stock price rose significantly, closing at a price of $5.53 on June 8.

Although the trading price of Hertz’s common stock has declined since then, closing at $2.52 on June 10, the company said the common stock continues to actively trade.

As a result, Hertz said it is seeking emergency approval to sell the stock to capture the potential value of unissued shares for the benefit of the debtors’ estates.

“The recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity for the debtors to raise capital on terms that are far superior to any debtor-in-possession financing,” the motion said.

The company said the net proceeds would be available for general working capital purposes.

Unlike typical DIP financing, Hertz said the stock issuance would not impose restrictive covenants on the debtors and would not impair any creditors, in addition to the fact that it would carry no repayment obligations or accrue interest or fees.

Hertz is an Estero, Fla.-based car rental company. It filed Chapter 11 bankruptcy on May 22. The Chapter 11 case number is 20-11218.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.