Hertz Global Holdings Inc, one of the largest worldwide rental company’s shares, skyrocketed by more than 50% after it selected a $6 billion turnaround bid that provides a rare payout to shareholders for a company in Chapter 11 bankruptcy.Knighthead Capital Management and Certares Management and other investment firms won the bid to take over Hertz Global Holdings Inc in its bankruptcy reorganization, which the company hopes to exit by the end of June.
This was reported in the Wall Street Journal in the auction results and said that the winning bid will pay shareholders close to $8 a share, an unusual payout in any kind of corporate bankruptcy. Some of that would be paid in cash with warrants and reorganized capital also accounting for a portion of the value. Apollo Global Management and a group of existing shareholders will join Knighthead and Cetares in taking control of Hertz Global Holdings Inc, which filed for bankruptcy last May.
The rental car firm shares jumped by as much as 68% before retreating some throughout the day. Its stock was trading at $5.78 a share as of 2.30 p.m. Wednesday, up by about 58%. Its market cap is nearly $900 million. It is one of the largest companies to file for Chapter 11 during the pandemic after demand evaporated during lockdowns last spring due to Covid-19. The demand for rental cars is outpacing supplies as the country reopens and some Americans continue to rent vehicles over flying.