Hertz in Talks to Settle Litigation Over Unsecured Notes

Hertz Global Holdings (OTC:HTZGQ), Inc. (NYSE:HTZ), currently valued at $1.32 billion in market cap, and its subsidiary, The Hertz Corporation, have entered negotiations with holders of the company’s unsecured notes regarding a potential settlement of ongoing litigation, as disclosed in a recent Form 8-K filing with the Securities and Exchange Commission. According to InvestingPro data, the company operates with a significant debt burden of $18.9 billion and faces challenges with interest payments.

Discussions began on Monday with the note holders after Hertz proposed a settlement on February 3, 2025. The note holders responded with a counter-proposal on February 6, 2025. The negotiations relate to a lawsuit filed on July 1, 2021, by Wells Fargo (NYSE:WFC) Bank, N.A., as indenture trustee for various unsecured notes issued by The Hertz Corporation. These notes include the 6.250% Unsecured Notes due 2022, 5.500% Unsecured Notes due 2024, 7.125% Unsecured Notes due 2026, and 6.000% Unsecured Notes due 2028.

The litigation’s details have not been fully disclosed, but the 8-K filing indicates that the discussions are part of a confidential process agreed upon by both Hertz and the note holders. The company has not yet reached an agreement with the note holders, and there is no guarantee that the negotiations will result in a settlement.

The ongoing negotiations are part of Hertz’s efforts to resolve the legal issues surrounding its unsecured notes. The outcome of these talks could have significant implications for the company’s financial position and its relationships with creditors, particularly given its concerning debt-to-equity ratio of 27.9x and negative EBITDA of $1.09 billion for the last twelve months. InvestingPro analysis reveals over 10 additional key financial insights about Hertz’s current situation.

Investors and stakeholders are closely monitoring the situation, as the resolution of the litigation could impact the company’s financial stability and future prospects. Hertz has expressed its intention to continue discussions in hopes of reaching a potential settlement.

The information provided in this article is based on the press release statement filed with the SEC.

In other recent news, Hertz Global Holdings is in negotiations with noteholders over a litigation settlement, according to a recent regulatory filing. The lawsuit, initiated by Wells Fargo Bank, pertains to disputes over various unsecured notes due between 2022 and 2028. Although no agreement has been finalized, Hertz intends to continue discussions in pursuit of a potential settlement.

In a report released by Bank of America (BofA), the firm projects market share losses for Hertz in 2025. This projection is based on the reallocation of more vehicles to on-airport locations by a leading competitor, which could result in a decline in market share for Hertz.

Additionally, Hertz has announced new executive appointments to its leadership team. Chris Berg and Doria Holbrook will join the company as Executive Vice President and Chief Administrative Officer, and Executive Vice President Mobility, respectively.

Hertz also disclosed its plan to issue an additional $500 million in senior secured notes. The offering is contingent on market conditions and will be conducted by its subsidiary, The Hertz Corporation. The proceeds are intended to repay outstanding borrowings under its revolving credit facility.

Lastly, during its Third Quarter 2024 Earnings Call, Hertz reported a Q3 revenue of $2.6 billion and an adjusted EBITDA loss of $157 million. Despite facing a significant noncash asset impairment charge, the company remains optimistic about its long-term prospects, with plans to improve fleet utilization and demand generation.

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