Car sit idle at the Hertz Rent-A-Car rental lot at San Francisco International Airport on April 30, 2020 in San Francisco, California.
Justin Sullivan | Getty Images
Hertz on Monday raised going concern doubts as the car rental company tries to cut costs and avoid debt default amid a blow to its business due to the Covid-19 pandemic, sending its shares down 4% in extended trading.
The company had a total debt of $18.75 billion as of March 31 and had last week said its lenders had extended the deadline for certain loan repayments to May 22, giving it more time to chalk out a financing plan to avoid bankruptcy.
The Estero, Florida-based company, whose largest shareholder is billionaire investor Carl Icahn with 38.94% stake as of March 11, said it was in talks with key stakeholders and advisors to develop a financing strategy.
Hertz said on Monday it expects $2.5 billion in annualized savings from cost-cutting measures it took such as layoffs and sale of excess fleet before the shut down of the used-car market.
“We are doing absolutely everything we can to preserve liquidity,” Chief Executive Officer Kathryn Marinello said in the quarterly report.
In the quarter ended March 31, Hertz’s net loss rose to $356 million, or $2.50 per share, from $147 million or $1.54 per share a year ago.