Car rental giant Hertz is continuing to move past its pandemic-driven bankruptcy with an upsized public offering and a slew of plans to remain a key player in what it calls the “modern mobility ecosystem.”
Hertz Global Holdings announced on Tuesday (Nov. 9) the pricing of the upsized public offering of 45.2 million common shares at $29.00 each, up from 37.1 million shares announced Nov. 3.
Two weeks earlier, in an Oct. 28 press release announcing third-quarter results, Hertz’s interim CEO Mark Fields said, “We see the opportunity for profitable growth by building on our iconic brand and global fleet management expertise, and combining it with new technology and new investments in electrification, shared mobility and a digital, customer-first experience.”
A Hertz Global Holdings subsidiary, Hertz Corp., operates the Hertz, Dollar and Thrifty vehicle rental brands, as well as the Firefly vehicle rental brand and Hertz 24/7 car-sharing business in international markets. It also sells vehicles through Hertz Car Sales.
Tuesday’s upsized public offering marks the company’s reemergence from Chapter 11 bankruptcy protection. Hertz filed to restructure its U.S. operations in May 2020, pointing to the onset of the COVID-19 pandemic and its effect on travel demand. A year later, in June of 2021, the company announced that it had successfully completed the process.
Seeing Opportunity for Profitable Growth
In the third quarter, Hertz generated revenue of $2.2 billion, up from $1.3 billion a year ago. The company said this reflects a continued rebound in leisure travel and tighter fleet inventory.
The results put Hertz “in a position of strength as we create the new Hertz and lead the future of mobility and travel,” Fields said in the Oct. 28 press release.
In the weeks leading up to its earnings call, the company announced a flurry of activity. This included placing an order for 100,000 Tesla electric cars for its car rental fleet by the end of 2022 (though Elon Musk later tweeted that no contract had been signed yet), signing seven-time Super Bowl champ Tom Brady for an ad campaign, partnering with Carvana to add a new online sales channel for used cars from its rental fleet and working with Uber to make up to 50,000 Teslas available by 2023 for drivers to rent when using the mobility platform.
Following a New Road Map
Hertz said these new initiatives will build on its iconic brand, global distribution network and other strengths.
“In a distinct shift from the past, we’re charting a new course that leverages the best of transportation and logistics management, alongside a strong digital backbone,” Fields said during the call. “This includes a new and comprehensive technology roadmap, focus on modernizing our technological offerings and delivering innovation and growth.”
He added that the company’s technology roadmap includes up to $250 million in investments through 2024, as well as the appointment of a new chief information officer to lead its implementation “with a focus on revenue and reimagining the customer experience.”
“Part of that work includes connecting our entire fleet to create a seamless customer offering, while lowering delivery costs,” Fields said. “We anticipate having a substantial portion of our fleet connected by the end of 2022.”
