American car rental giant, Hertz, has filed for bankruptcy protection, citing a sharp decline in revenue and future bookings as a result of the global COVID-19 pandemic.
This comes after the company’s debt mounted to $19 billion and nearly 700,000 vehicles remain idle due to the COVID19 pandemic.
In March, responding to the deteriorating economic circumstances, Hertz laid off 12,000 workers and furloughed an additional 4,000 employees—25% of its workforce.
However, as Forbes reports, Hertz was already struggling before COVID-19 struck; accumulating debts worth $58 million in 2019 alone, amid stiff competition from ride-hailing companies such as Uber and Lyft.
The filing for bankruptcy will postpone its obligations to creditors and therefore give it time to reorganize its debts or sell parts of its business.
The Hertz Corporation, a subsidiary of Hertz Global Holdings Inc., is an American car rental company that is based in Estero, Florida. It operates 10,200 corporate and franchisee locations internationally.
It is the second-largest US car rental company by sales, locations, and fleet size, operating in 150 countries in Europe, North America, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East, and New Zealand.
As of 2018, the company had revenues of $9.5 billion, assets worth $21.3 billion, and 38,000 employees.