Summary List Placement
Hertz shareholders are one step closer to seeing more than $1 billion of value returned.
The car rental giant and original “meme stock” said on Thursday its restructuring plan has been confirmed by a bankruptcy court, paving the way for creditors to be paid in full and existing shareholders to receive more than $1 billion of value.
Andrew Glenn, who championed the deal for shareholders as the managing partner of Glenn Agre Bergman & Fuentes, told Insider he’s “thrilled, but not surprised” that the court approved the deal.
“We put forward the highest and best value and the court recognized that extraordinary outcome in her comments at the end of the hearing,” he told Insider, speaking about Delaware bankruptcy judge Mary F. Walrath’s comments.
The company is on target to exit Chapter 11 bankruptcy on June 30, Hertz said.
“With the court’s approval of our plan today and a committed new investor group, we are poised to exit Chapter 11 by the end of this month as a well-capitalized and even more competitive company, with the flexibility and resources to pursue exciting new growth opportunities,” CEO Paul Stone said Thursday.
The rental-car company’s emergence out of bankruptcy has come as a surprise to many, particularly because the restructuring plan includes a payout to equity investors. Typically, in a corporate bankruptcy case like Hertz’s, equity shareholders would receive nothing.
Hertz has estimated shareholders will get a payout of $7-$8 a share, according to court papers cited by the Wall Street Journal.
When Hertz exits bankruptcy, all shareholders will receive $1.53 in cash per share, their portion of a 3% stake in the restructured business set aside for shareholders, and warrants for an additional 18% stake.
Certain accredited shareholders in Hertz, like institutional investors and wealthier individuals, can forego the warrants and instead participate in an equity …read more