Hertz has scrapped a plan to sell $500 million worth of stock, a move coming a day after the car rental company in the throes of bankruptcy reorganization disclosed that federal regulators were reviewing the proposed offering.
In a regulatory filing Thursday, Hertz said that its board of directors determined that ditching the stock offering was in the best interests of the company.
Hertz Global Holdings Inc. filed for bankruptcy protection last month after the coronavirus pandemic crushed global travel and with it, the heavily indebted 102-year-old company’s business.
Selling stock would have been an unusual move for a company in Hertz’s position, because its likely the shares would be rendered worthless. Despite this, the Estero, Florida-based company said Monday it had received approval from the bankruptcy court to proceed with the stock sale.
Trading in Hertz shares were halted for several hours for the second day in a row Thursday and resumed following the disclosure. They ended down 10% at $1.80.
Hertz’s stock had been surging, climbing 80% this month, but remains down more than 88% this year.