‘No business is built for zero revenue,’ says firm’s former chief executive. ‘There’s only so long that companies’ reserves will carry them’
The 102-year-old car rental company Hertz has filed for bankruptcy after the coronavirus pandemic caused business to nosedive.
At the end of March, the firm was $18.7 billion (£15.3 billion) in debt with only $1 billion (£820 million) of available cash.
Hertz, which has over 400 outlets across the UK and Ireland, recently cut 12,000 staff from its global workforce and put another 4,000 on furlough. Chief executive Kathryn Marinello resigned last week following reports of possible bankruptcy.
The company lost all revenue from mid-March when the global travel industry came to a shuddering halt. Much of the firm’s income is sourced from car rentals at airports but it started missing debt payments in April.
Ms Marinello said at the company’s first-quarter earnings conference on 12 May: “No business is built for zero revenue. There’s only so long that companies’ reserves will carry them.”