Hertz to pay lenders $650 million to resolve dispute over fleet decrease

Hertz Global Holdings, which in addition to its own rental car brand consists of the Dollar and Thrifty brands, stated on Friday it has reached an interim $650-million deal with its lenders for resolving a bankruptcy court fight over the company’s plan to decrease its leased fleet of rental cars. According to reports, the deal will slash the debt Hertz owes lenders who financed its rental car fleet by $6 billion by December 31, decreasing to less than $5 billion from $11 billion.

According to the agreement, Hertz will pay $650 million in cash in equal monthly installments from July to December. The car rental company will also dispose of at least 182,521 leased vehicles between June and December. Hertz has listed a huge number of vehicles for sale on its website, many at very attractive costs in an effort to greatly decrease inventory.

Hertz had filed for bankruptcy in May after its business declined due to coronavirus crisis and talks with its lenders failed to bring much-needed relief.