Economy

Car rental company Hertz files for bankruptcy in US and Canada | Financial

“The impact of Covid-19 on travel demand was so sudden and dramatic, causing an abrupt drop in the company’s revenues and future bookings,” said Hertz in a press release. The bankruptcy filing does not apply to major regions, including Europe, Australia and New Zealand, where the company operates.

Earlier, Bloomberg news agency reported that consultations between the car rental company and its creditors about deferred payment had stalled. A deadline expired on Friday. Hertz ran into problems when both business trips and vacations were canceled due to corona measures in many countries. As a result, hardly any cars were rented.

The creditors granted Hertz deferral in April for an installment of approximately $ 400 million on lease contracts. Then they weren’t bothered about that, because the price of second-hand cars had fallen by more than 15 percent and they were afraid they wouldn’t earn their money back in Hertz bankruptcy. Nowadays occasions are worth a bit more and creditors dare to bet higher.

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