Hertz proposes shareholder payment as part of bankruptcy exit plan

Hertz Global Holdings Inc. agreed to give value to shareholders when it left Chapter 11, confirming the individual traders who insisted the company was worth something, despite the fact that the bankruptcy had been filed.

In a Chapter 11 retirement plan on Wednesday, Hertz suggested that current shareholders receive warrants to buy up to 4% of the restructured business, the first time the company says it’s worth giving some value to its owners Share.

The shareholder distribution would amount to a recovery of 60 to 70 cents per share, a ‘substantial return to equity’, lawyer Thomas Lauria van Hertz said during a court hearing on Wednesday.

If approved by the U.S. Bankruptcy Court in Wilmington, Del., Hertz would be a relative rarity in corporate bankruptcies, in which equity is behind debt and mostly wiped out. Hertz shares closed at $ 1.74 on Wednesday, up 8.4% on the day, but up 36% so far.

The proposed dividend to equity is part of a restructuring proposal proposed by Dundon Capital Partners LLC, Centrebridge Partners LP and Warburg Pincus LLC, selected by Hertz earlier this month following a competitive process to finance the company’s exit from Chapter 11.

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