Hertz Global Holdings Inc. (HTZ) shares skyrocketed over 100 percent this morning following the news that the company has managed to secure a debtor in possession (DIP) financing worth $1.65 billion.
The bankrupt rental car company said it will use the financing to offer equity for vehicle procurements in the United States and Canada. Moreover, it plans to use up to $800 million for working capital and other corporate purposes. Hertz needs to get court approval for the DIP financing for which it has already filed a motion.
The company’s Chief Executive Paul Stone said the financing will provide further financial flexibility as the company take measures to best place its business for future and continue to go through the pandemic’s impact on travel industry.
The DIP financing will also support Hertz in the next phase of chapter 11 process. The aforesaid financing is offered by the company’s certain first-lien lenders and is anticipated to be considered as a delayed draw term loan.
HTZ shares are currently trading around $2.10, up more than 100 percent when compared to a closing price of $1.0300 in the previous trading session and marking the highest trading price in more than four months. The company’s trading volume surpassed 260 million shares today, making it one of the most active stocks of Friday morning. The current volume is well above average trading volume of 8 million.
The 52-week range of the stock is $0.4000-$20.8500, while HTZ market cap stands at $318.363 million. Looking at the previous performance of Hertz, the stock saw a sharp decline of nearly 86 percent over the past 12 months. On year-to-date basis, its share price fell over 87 percent, while in the past six months the share price tumbled around 65 percent. Comparatively, shares of rival Avis Budget Group Inc. (CAR) have dropped just 5 percent so far this year.