Hertz Faces Financial Struggles with $186 Million Loss in Q1 2024

Published 2 hours agoHTZ

Hertz Faces Financial Struggles with $186 Million Loss in Q1 2024

Hertz Global Holdings Inc. is weathering substantial financial difficulties as it reports a GAAP net loss of $186 million for the first quarter of 2024, translating to a loss of $0.61 per diluted share. The company's adjusted net loss totals $392 million, or $1.28 per diluted share, alongside a negative adjusted Corporate EBITDA of $567 million. These figures are largely influenced by a $588 million surge in vehicle depreciation costs, which include $195 million attributed to electric vehicles (EVs) slated for sale.

In a bid to stabilize its financial position, Hertz has initiated liquidity enhancement measures, including a plan to raise $750 million through a two-part secured notes offering. This effort comprises $500 million in First Lien Senior Secured Notes and $250 million in Exchangeable Senior Second-Lien Secured PIK Notes. Reuters noted that the funds raised will be used to pay down a portion of the company's $2 billion revolving credit facility and to bolster overall liquidity.

Hertz is navigating challenges around its EV strategy, which has involved lower than expected customer interest and high depreciation costs. The company plans to sell an additional 10,000 EVs, aiming for a total of 30,000 sales by the end of the year. Despite these efforts, Hertz's stock has suffered, with Reuters reporting a more than 70% decrease in value year-to-date. The stock is currently priced at $6.10, showing a slight day change from previous figures.

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