Hertz Seeks Highly Unusual Move Amid Bankruptcy
In the latest wild turn for Hertz (NYSE: HTZ), the well-known vehicle rental company that is progressing through the bankruptcy process, the company's seeking to take advantage of the recent speculative pop in its share price.
Hertz is asking the bankruptcy court to approve the company to issue up to 246.78 million common shares and generate anywhere from $600 million to over $1 billion, looking at recent closing prices for the stock. "The recent market prices of and the trading volumes in Hertz's common stock potentially present a unique opportunity for the debtors to raise capital on terms that are far superior to any debtor-in-possession financing," the company said in a court filing.
When Hertz filed for bankruptcy on May 22, the company had roughly $1 billion in cash to continue funding its operations while the bankruptcy process plays out. Sure, this potential offering could give the company more capital to fund its operations. But make no mistake: When a company files for bankruptcy, its primary objective is to pay back its lenders in full or as much as possible.
Source Fool.com
