American car rental company Hertz filed for bankruptcy protection Friday in the wake of the coronavirus pandemic that has crippled global travel and with it, the heavily 102-year-old car rental company’s business, reports The Associated Press.
The Estero, Florida-based company’s lenders were unwilling to grant it another extension on its auto lease debt payments past a Friday deadline, triggering the filing in US Bankruptcy Court in Delaware.
Hertz and its subsidiaries will continue to operate, according to a release from the company. Hertz’s principal international operating regions and franchised locations are not included in the filing, the statement said.
Starting in mid-March, the company — whose car-rental bands 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, the company shed 12,000 workers and put another 4,000 on furlough, cut vehicle acquisitions by 90% and stopped all nonessential spending. The company said the moves would save $2.5 billion per year.