(Bloomberg) – Hertz Global Holdings Inc. has struck a deal that will reduce its debt to lenders who financed its rental car fleet to less than $ 5 billion from $ 11 billion by December 31, it said on Friday the company’s chief bankruptcy attorney in court. .
Under an agreement with lenders, Hertz agreed to sell 182,000 cars in the coming months, Tom Lauria told US bankruptcy judge Mary Walrath. The settlement requires Hertz to make $ 650 million in lease payments. The $ 11 billion reduction in vehicle debt is tied to car sales, Lauria said.
The deal “required a bit of good luck,” he said, referring to a boost in the used car market that began in recent months.
Hertz and his vehicle lenders had been arguing about how much the company owed under a lease that governs the fleet. Attorney Marshall Huebner said the lenders he represents believe they were owed $ 1.8 billion in regular payments through Dec. 31 under that contract. Hertz and lower-ranking creditors have maintained that the amount was much lower.
“I like to see peace break out,” Walrath said when approving the deal.
The case is Hertz Corp. 20-11218, US Bankruptcy Court, District of Delaware (Wilmington).
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