Skift Take
It will certainly be a challenge to transform Hertz's business. However, the car rental company is not only getting a financial lifeline, but also an assist from private equity firm Certares' wide-ranging travel rollup strategy. This will be a long-term play.
Private equity firms Certares Management and Knighthead Capital Management are teaming up to lead Hertz out of Chapter 11 bankruptcy by July through a $4.2 billion reorganization plan endorsed by the beleaguered Florida-based car rental company.
The two firms are co-sponsors of a reorganization plan, which Hertz Corp. filed Tuesday morning in the U.S bankruptcy court in Wilmington, Delaware. The deal is subject to the approval of creditors and the court.
The 102-year-old Hertz filed for Chapter 11 in May, brought down by the standstill in travel from the pandemic.
Certares and Knighthead would hold at least a 51 percent stake in Hertz, and have a majority of the board seats. No major management changes are in the offing in the reorganization plan that was negotiated with Hertz.
Creditors can opt to receive 70 cents on the dollar if they wish to cash out or they can roll over their Hertz shares under the new ownership structure. The size of the deal could range from $2.4 billion to $4.2 billion, depending on how many creditors take the cash.
Certares is a major travel investor, and has been rolling up assets in business travel, airlines,
