HERTZ CARSHARING SERVICE FILED FOR BANKRUPTCY

Hertz Global Holdings, the world’s leader in the car rental services, was not able to withstand the protracted pandemic of the new coronavirus and filed for bankruptcy. The speech is exclusively about the parent company and several subsidiaries, located on the North American continent.

However, the market experts are already talking about the domino effect of bankruptcy of the brand, which will affect the entire transport industry of the United States and other countries. Bankruptcy of the holding company, which is the world’s leader in the carsharing services, could affect both car manufacturers and the used-car market.

The company was established in 1918, having successfully survived the Great Depression and the World War II. It all started with a small car rental company called Rent-a-Car Inc. John Herts, who bought the company a few years later, gave it his name. However, the success of the company was achieved by the founder, Walter Jacobs, who remained the permanent leader until 1968. The payment for the rental services with a credit card, company’s cars at the largest airports of the world – all these was achieved thanks to him. So the Hertz Drive-Ur-Self System company, later renamed The Hertz Corporation, gradually became the market leader.

American experts note that none of the companies that previously went bankrupt due to the coronavirus pandemic in the USA had such weight as the Hertz did.

The company shares the car rental market with Avis Budget and Enterprise - it has more than 10,200 offices in 150 countries all over the world. In Russia, it had been actively developing from 1996 to 2017, after which it actually stopped working under the pressure from the competitors in the car-sharing industry.

It is worth noting that the difficult financial condition of the company was obvious even before the pandemic. Last year, Hertz renewed almost 50% of its fleet, ending 2019 with a loss of more than $ 100 million. The amount of the total debt to the creditors by this time reached $ 17 billion. Most likely, the holding would have managed to cope with the debts if it had not been for the collapse of the business due to a pandemic. The company tried to postpone the issue of bankruptcy by agreeing with the creditors on the deferred payments (first until May 4, then until May 22).

Catherine Marinello, the CEO of the company, has repeatedly stated that they would try to do everything possible. As a result, the lawyers, specializing in the bankruptcy proceedings, still had to be hired.

Now, according to the estimates of the expert, Hertz has about $ 1 billion in assets, which the management plans to spend on the support of the company's work during the restructuring period.

The head office of the company noted that bankruptcy procedures in the United States should not affect the representative offices operating in Australia, New Zealand and Europe. The franchising structures, operating under the Hertz brand, are not included in the bankruptcy proceedings as well.