Weeks after filing for Chapter 11 bankruptcy protection on May 22, car rental company Hertz is selling vehicles in its fleet at discount prices.
As of Saturday morning, Hertz had thousands of used cars available on its website HertzCarSales.com. The volume of cars for sale in an area depends on the location used in the search and vehicles are delivered free up to 75 miles.
The coronavirus pandemic has forced several companies strained prior to the crisis to file for bankruptcy to try to survive. J.C. Penney, Neiman Marcus, Tuesday Morning are among the chains that filed for bankruptcy since the start of the pandemic. Hertz competitor Advantage Rent A Car filed for court protection from its creditors May 26.
Hertz's current fleet consists of roughly 700,000 rental cars, which have greatly diminished in value due to a sharp drop in used car prices caused by a free fall in auto sales stemming from the pandemic.
In a search on the Hertz website within 1,000 miles from Fort Lauderdale, Florida, there were more than 23,500 cars available Saturday with a 2017 Hyundai Elantra SE Sedan with nearly 71,000 miles selling for $7,597. According to website iSeeCars.com, the car was selling for $1,740 below market price.
A search within 1,000 miles of Beverly Hills, California, had close to 21,000 cars available Saturday.
Outside of the 75-mile radius for free delivery, fees vary. Delivery between 76 and 200 miles costs $300. Within 600 to 800 miles, the cost is $1,000, Hertz explains on its website.
Hertz bankruptcy stock sale
Hertz Global Holdings Inc. racked up more than $24 billion in debt by the end of March, according to its bankruptcy filing, with only $1 billion in available cash.
Starting in mid-March, the company - whose car-rental brands also include Dollar and Thrifty - lost all revenue when travel shut down due to the coronavirus. The company made "significant efforts" but couldn't raise money on the capital markets, so it started missing payments to creditors in April, the filing said. Hertz has also been plagued by management upheaval, naming its fourth CEO in six years on May 18.
In late March, Hertz shed 12,000 workers and put another 4,000 on furlough. It cut vehicle acquisitions by 90% and stopped all nonessential spending. The company said the moves would save $2.5 billion per year.
On Friday, bankruptcy court approved Hertz's request to sell 246.8 million unissued shares to Jefferies LLC to raise up to $1 billion in new equity.