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Lee County car rental giant Hertz has had a busy week leading up to early April.
First the Estero-based company, which filed for bankruptcy May 22 with $25.84 billion in assets and $24.35 billion in debts, competed the sale of its wholly-owned fleet management subsidiary, Donlen Corp., March 30. Athene, a publicly-traded financial services company with $200 billion in assets under management, acquired Donlen for $891 million in cash, according to a statement. "Hertz is very pleased with the successful outcome of the sale process for Donlen, which marks another significant accomplishment in our financial restructuring,” Hertz President and CEO Paul Stone says in a statement.
Then, on April 3, the company announced it had chosen a restructuring offer from a consortium of bondholders and investment firms that could allow it to exit Chapter 11 bankruptcy by June. The proposal, from Centerbridge Partners L.P., Warburg Pincus LLC, and Dundon Capital Partners LLC, would eliminate some $5 billion of debt, according to a separate statement. It would also provide more than $2 billion of global liquidity and eliminate all corporate debt on Hertz’s European business. The company would sell a 48% equity stake to bondholders to satisfy debt claims, the release adds, representing about 75 cents on the dollar.
The Centerbridge-led offer competed with another bid, also led by equity firms. And while Hertz officials, in the statement, say more than 85% of its unsecured bondholders support the Centerbridge bid, it requires approval from the bankruptcy court and is subject to a creditor vote. “We are pleased to be moving forward with an enhanced proposal supported by our largest creditor constituency and that delivers excellent value to all our stakeholders,” Stone says in the statement. “We look forward to emerging from Chapter 11 in the second quarter financially and operationally stronger, and well-positioned to achieve the opportunities in the rebounding travel market."
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