During Hertz’s chapter technique it has sold about 100,000 used cars to lessen its fleet. The company plans to sell nearly 200,000 more before the end of the year, and the 2 sales might have forced it to the edge. But the drop admired during the coronavirus pandemic in the country is more than with regards to Hertz. The dramatic drop in airline travel beginning in March this year has upended many agencies pretty much in a single day, and there’s no analysis on just when the travel industry might return to pre pandemic levels, if ever.
More importantly for Hertz, there is no such thing as a diagnosis on whether travel demand is going to come in time to avoid wasting the company, but Hertz is hardly alone in the rental car panorama and its catch 22 situation can hardly be said to be restricted to its own operations. “In our case, the forecasts might be much more speculative than normal, because they could involve fundamental adjustments in the nature of our capital structure,” Hertz noted. “Additionally, the impact of the COVID 19 pandemic on the travel industry in usual, and on us, make it even more challenging than usual to broaden forecasts on enterprise. Accordingly, we expect that our actual economic situation and results of operations will differ, in all probability materially, from what we’ve expected. Consequently, there can be no insurance that the effects or developments pondered by any plan of reorganization we may enforce will occur or, even supposing they do occur, that they will have the expected results on us and our subsidiaries or our agencies or operations. The failure of such a results or advancements to materialize as anticipated could materially adversely affect the successful implementation of any plan of reorganization.
“”With the global financial system shut down, rising unemployment and many capabilities car buyers area to stay at home orders, the demand for used automobiles declined dramatically leading to a serious drop in used automobile values,” the company said in an identical filing. “This decrease in used vehicle values would have required the Company to pay an additional about $135 million under the Operating Lease in April 2020. Additionally, the challenging used automobile market made it complex for the Company to sell cars to lessen the scheduled depreciation aspect of the monthly rent bills. Consequently, the Company determined not to make lease payments totaling about $400 million in April 2020.