Car rental company Hertz has filed for bankruptcy due to debts and paralysis of global travel due to the coronavirus pandemic, according to court documents.
The company, which has more than 400 outlets in the UK and Ireland, including a branch at Birmingham Airport, had $ 18.7 billion (£ 15.3 billion) in debt at the end of March and only $ 1 billion (£ 820 million) available cash.
It was recently forced to cut 12,000 people from its global workforce and another 4,000 on leave, but measures came too late to save the 102-year-old company.
As of mid-March, the company lost all earnings when the trips were halted due to the coronavirus pandemic and it began to miss debt in April.
Hertz has also been plagued by the upheaval in management and will appoint the fourth CEO in six years on May 18.
“No company is built for zero income,” said former boss Kathryn Marinello during the conference call for the first quarter profit on May 12.
“It’s only been so long that corporate reserves will carry them.”
Hertz’s bankruptcy protection was no surprise.
In its first quarter report filed with securities regulators earlier in May, the company warned that it may not be able to repay or refinance debt and may not have enough money to continue working.
“Management has concluded that there is significant doubt about the company’s ability to continue operating within one year of the issue date of this quarterly report,” it said.
A Chapter 11 restructuring will require creditors to settle for less than the full refund, but the company is likely to continue.
Hertz has been approached for comment on the effects of the bankruptcy on its UK and Irish operations.