Hertz Global Holdings announces plans to raise $750 million through secured notes offerings to strengthen its balance sheet after facing losses due to weak demand for electric vehicles (EVs).
Bollywood Fever: Hertz Global Holdings announced on Thursday its intention to raise $750 million through secured notes offerings. The move aims to strengthen the company’s balance sheet following a failed bet on electric vehicles (EVs).
In early June, Hertz appointed Spirit Airlines CFO Scott Haralson as its new finance chief. This leadership change came in response to the declining demand for EVs in Hertz’s inventory, which has further exacerbated the company’s financial losses.
With weak demand for EVs affecting earnings, Hertz is restructuring its business and plans to sell an additional 10,000 EVs, bringing the total planned sales to 30,000 this year. However, the company acknowledged on Thursday that it may not achieve the remaining 11,000 planned EV disposals as expected.
Hertz also anticipates continued elevated vehicle depreciation throughout 2024. The company, based in Estero, Florida, incurred a $588 million hit in vehicle depreciation costs during the first quarter ended March 31, with $195 million related to EVs held for sale.
The company’s financial performance has been under pressure, reporting a quarterly loss of $1.28 per share, significantly wider than the 44-cent loss anticipated by Wall Street. Hertz has missed analysts’ earnings per share estimates for the past three quarters.
Despite the announcement, Hertz’s shares, which had risen 2.6% in premarket trading on Thursday, have lost over 70% of their value so far this year.
As Hertz continues to navigate the challenges posed by its EV investments, the company is taking steps to stabilize its financial position and adapt to market conditions. The secured notes offerings represent a strategic effort to manage its debt and address the impact of its recent financial setbacks.
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