Скачать или смотреть Hertz's $16 Billion Rebirth: A Quick Look

This is how Hertz (the car rental company) got into bankruptcy, and back out again!

Hertz Global Holdings (formerly The Hertz Corporation), known as Hertz, is an American car rental company based in Estero, Florida. The company operates its namesake Hertz brand, along with the brands Dollar Rent A Car, Firefly Car Rental and Thrifty Car Rental.

It is one of the three big rental car holding companies in the United States, holding a 36% market share, placing it ahead of both Enterprise Holdings and the Avis Budget Group. As one of the largest worldwide vehicle rental companies by sales, locations, and fleet size, Hertz operates in 160 countries in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East and New Zealand.

Hertz was ranked 326th in the 2020 Fortune 500 list. The company filed for bankruptcy on May 22, 2020, citing a sharp decline in revenue and future bookings caused by the COVID-19 pandemic. As of December 31, 2021, the company had revenues of $7.3 billion, assets of $19.7 billion, and 23,000 employees. As of July 1, 2021, the company is no longer in Chapter 11 bankruptcy.

Transcript:
It's 2020.
The world has locked down.
A raging pandemic has sweeped across almost every nation.
Nobody is travelling.
Nobody is visiting loved ones
and certainly nobody is renting cars.

If you're running a car rental company that financed most of it's rental cars...
You'd be in trouble.

This is Hertz.
They're a car rental company based in Florida.
Originally known as Rent-a-car, it was founded in 1918 and over the next century it would become an industry leader, commanding 12.7% of the total market share of the rental car market today.

However,
When the pandemic hit, the travel industry dried up, particularly in the business sector, which was a massive portion of Hertz's rental business.
Hertz reported a 73% decrease in revenue in the second quarter of 2020.
The company was also faced with a huge drop in demand for used cars. This was a problem because another significant part of Hertz business model was the resale of rental vehicles once they had been retired.
These funds were crucial in paying back the creditors that Hertz used to finance its fleet.

With over $18.7 billion in debt and only $1 billion of available cash, it was forced to file for Chapter 11 Bankruptcy on May 22nd, 2020.

If it filed for bankruptcy, how come it's still around today?
A chapter 11 bankruptcy is a little different.
Instead of just declaring that everything is over, a chapter 11 is a restructuring and reorganisation.

Just before bankruptcy, Hertz paid $16 million in retention bonuses to key executives in the company. An incentive to stay with the company for the long-haul and to help it navigate the bankruptcy process.
In late 2020, there was a rebound in the car market. Hertz took advantage of this to sell off more than 180,000 of it's roughly 500,000 car fleet.
It also sold its European fleet to a new entity, for €1.1 billion.
Then they accepted a $6 billion bid from a group of investors. The deal allowed them to pay off $5.9 billion in debt and reduce its interest expenses by 80%.
Along with the influx of money from asset sales, they also improved their customer service and loyalty programs to retain them throughout the pandemic.
They then expanded their offerings to include monthly rentals, car subscriptions, delivery services, and the opportunity for customers to outright buy the cars from them.
Hertz successfully emerged from Chapter 11 bankruptcy in June 2021, having reduced its debt by more than $16 billion.
The company said it was well-positioned for the future, ready to capitalize on the travel rebound and it's still around today!

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#illustratedfinance #finance #money #interesting #didyouknow #economics #hertz #cars #travel #education #facts #animated #learning #edutainment #entertainment

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