Investing.com - Hertz Global Holdings Inc (NASDAQ:HTZ) ticked 0.3% higher in after-hours trade, after sources familiar with the matter revealed that the company is contemplating the sale of at least $700 million in secured debt along with a convertible notes offering.
Potential investors have been approached about the secured debt issue by the company's advisors. However, the details of any financing, including size and terms, could still be altered.
The company's new leadership, headed by ex-Delta Air Lines executive Gil West, is focusing on improving liquidity, optimizing operations, and cutting costs. This includes plans to offload Tesla (NASDAQ:TSLA) electric vehicles that were purchased but found to be unpopular with customers and costly to maintain.
The company experienced a significant cash burn of $860 million over the last two quarters due to the impact of its EV investment on profits.
Hertz reported a first-quarter loss of $1.28 per share or $392 million, nearly three times more than what analysts had predicted.
Bloomberg Intelligence senior credit analyst Jody Lurie noted, “Hertz’s issues stem from cost, not revenue, and any potential debt sale helps to fill cash gaps while the company sorts through its fleet issues.”
A Hertz representative declined to comment.