Hertz Global (OTCMKTS:HTZGQ) stock is taking one heck of a beating on Tuesday as the bidding war for the bankrupt car rental company continues.
The latest news affecting HTZGQ comes in the form of a proposed offer to lift the company out of bankruptcy. It comes from affiliates of Knighthead Capital Management LLC, Certares Opportunities LLC, and Apollo Capital Management, LP.
The offer would have these groups funding Hertz Global’s Plan of Reorganization. They would do this with “direct common stock investments aggregating $2.9 billion, direct preferred stock investments aggregating $1.5 billion and a rights offering to raise $1.36 billion.”
To go along with this, the Plan of Reorganization also includes an amendment. That includes the complete payment of all secured and unsecured funded debt. It also would provide holders of HTZGQ stock with 50 cents per share in cash. In addition to that, it includes “10-year warrants for an aggregate of 10% of the reorganized company or, for eligible stockholders, the possibility of subscribing for shares of common stock in the rights offering.”
Hertz Global notes that its Board of Directors has yet to make any decision concerning the proposed offering. It plans to review the offer alongside the bankruptcy court, which it needs approval from to move forward with any such effort.
Despite the uncertainty surrounding Hertz Global, today’s news has shares seeing heaving trading. That includes some 9 million shares of the stock changing hands as of this writing. For comparison, its daily average trading volume is closer to 7 million shares.
HTZGQ stock was down 5.3% as of Tuesday morning.
Investors that aren’t comfortable with Hertz Global due to its bankruptcy have other penny stock options.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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