Hertz (NYSE:HTZ) may have to face bankruptcy if it can’t turn its business around, but it’s not happening just yet.
Reports coming out after-hours Monday reveal that the car rental company brought on an advisor to assist with a possible bankruptcy. That news saw HTZ stock take a beating after normal trading hours closed.
Now its Tuesday and Hertz is still seeing its stock decline as investors react to the news. However, there has been a slight change that means the company may not have to come face-to-face with a bankruptcy filing.
Hertz has reached an agreement with lenders that will allow it to put off payments on its $17 billion in debt. Its lenders are giving it until May 22 to come up with a plan for repaying those debts.
Considering that recent reports said the Hertz bankruptcy could be announced this week, that’s good news. Unfortunately, there’s still a problem. HTZ’s business isn’t doing so hot thanks to the novel coronavirus killing off travel.
With that in mind, HTZ investors are still rightfully worried about a Hertz bankruptcy. Even if the company can come up with a solid plan, it needs business. It’s unknown how long the coronavirus pandemic will last, which means the company could go a long time before bouncing back, reports The Motley Fool.
HTZ stock was down 14.3% as of Tuesday afternoon and is down 77.6% since the start of the year.
As of this writing, William White did not hold a position in any of the aforementioned securities.
