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Hertz Selects Equity Sponsor For Chapter 11 Exit

Vehicle rental company Hertz Global Holdings, Inc. (HTZGQ) announced that it has selected an enhanced proposal from Centerbridge Partners, L.P., Warburg Pincus LLC, and Dundon Capital Partners, LLC collectively, the "Sponsorship Group" to provide the equity capital required to fund Hertz's exit from Chapter 11, keeping the Company on track to conclude its Chapter 11 case in June 2021.

Last May, Hertz filed for bankruptcy protection as pandemic destroys car rental business.

The proposed transaction is supported by holders of over 85% of the Company's unsecured notes. The proposal was selected by the company over a rival bid from Knighthead Capital Management LLC and Certares Management LLC in a competitive process, according to papers filed Saturday in the U.S. Bankruptcy Court in Wilmington, Del.

Under the deal, the supporting noteholders have agreed to support the exchange of the unsecured funded debt claims against the company for approximately 48.2% of the equity in the reorganized company, and the right to purchase an additional $1.6 billion of equity.

They have also committed to purchase, or otherwise backstop, the full $1.6 billion of equity being offered to the holders of the company's unsecured funded debt.

At exit, the Company would eliminate approximately $5 billion of debt, have over $2 billion of global liquidity, and completely eliminate all corporate debt on its European business.

Any restructuring plan that Hertz puts forth requires approval from the bankruptcy court and will be subjected to a creditor vote.

Paul Stone, President and Chief Executive, said: "We are pleased to be moving forward with an enhanced proposal supported by our largest creditor constituency and that delivers excellent value to all our stakeholders. This plan accomplishes all the goals we set out to achieve through our financial restructuring. Our new sponsors combined with our strong leadership team will bring significant operational experience across fleet financing and management, which will benefit all of our stakeholders".

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