Hertz (NYSE:HTZ) news for Friday includes debtor-in-possession (DIP) financing of $1.65 billion rocketing HTZ stock higher.
According to a Hertz news release, the company has secured commitments for the DIP financing and is seeking approval from the U.S. Bankruptcy Court for the District of Delaware. The financing is coming from certain pre-petition first-lien lenders of the company.
The Hertz DIP is being set up as a delayed draw term loan debtor facility. The company also has set purposes for the financing. That includes using as much as $800 million of it for working capital and general corporate purposes. The DIP financing also allows the company to use up to $1 billion for purchasing vehicles in the U.S. and Canada.
Paul Stone, president and CEO of Hertz, said the following of the news.
“This new financing will provide additional financial flexibility as we continue to navigate the pandemic’s effects on the travel industry and take steps to best position our business for the future. We are pleased with the strong interest from our pre-petition first-lien lenders and appreciate their support of Hertz and our future opportunities as a rental car leader.”
Hertz notes that approval for the DIP financing has to complete customary closing conditions first. It has a hearing on Oct. 29 that should help move the process forward.
Hertz has been a wild ride all year long. After filing for bankruptcy, the company continued to see major stock movement thanks to Robinhood investors. Investors that picked up the stock at its lows are likely happy with today’s news.
HTZ stock was up 68.9% as of Friday morning.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.