By Dhirendra Tripathi
Investing.com – Hertz (OTC:) soared 56% Wednesday as traders lapped up the news that the company has accepted a $6 billion bid from a clutch of investors to exit Chapter 11.
Funds and accounts affiliated to Knighthead Capital Management, Certares Opportunities and Apollo Capital Management will provide the equity capital to fund Hertz’s revised plan of reorganization and exit Chapter 11 proceedings.
The fate of the offer hinges on two court hearings now, one on May 14 and the other on June 10.
The Knighthead group’s proposal would eliminate approximately $5 billion of Hertz’s corporate debt including the elimination of all corporate debt of its European business.
It will additionally provide the car rental operator with over $2.2 billion of liquidity. Hertz will also have to go for equity dilution at a later stage to fund the proposal.
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