Hertz Global Holdings said on Thursday it intends to raise $750 million through a two-part secured notes offering, as the company looks to shore up its balance sheet after a failed bet on electric vehicles.
The car rental firm expects to use the proceeds from the offering to pay down a portion of its $2 billion revolving credit facility and to improve its liquidity, reports Reuters.
In early June, Hertz named Spirit Airlines CFO Scott Haralson as its new finance chief, after the declining demand for the EVs in its stock pushed the company into further losses.
With weak demand for EVs weighing on earnings, Hertz is slimming down the business and plans to sell 10,000 more EVs, taking its total planned sales to 30,000 this year.
Hertz said on Thursday it may not achieve the 11,000 remaining planned EV disposals in the time and manner it expects.
It also expects elevated vehicle depreciation to continue throughout 2024.
The Estero, Florida-based company took a $588 million hit in vehicle depreciation costs during the first quarter ended March 31, of which $195 million was related to EVs held for sale.
In a regulatory filing, the car rental firm said it is increasing the pace at which it refreshes its fleet of vehicles and reduce the dependence on EVs, which will lead to some depreciation costs being recorded sooner than expected.
Due to these expenses, Hertz expects an adjusted corporate loss before interest, taxes, depreciation and amortization of $435 million to $495 million in the second quarter.
It had reported a core profit of $347 million last year. The company’s shares, which were down 3% in morning trade, have lost over 70% of their value so far this year.
