Hertz may be on verge of liquidation

Carl Icahn’s car-rental company Hertz may be skidding toward liquidation, The Post has learned.

The 102-year-old Hertz — known for tapping O.J. Simpson as its spokesman in the 1970s — could file for bankruptcy in the coming days tied to a tardy collateral payment next due on Friday.

As The Post has previously reported, the company’s executives have been trying to postpone the roughly $500 million payment — tied to the declining value of Hertz’s 500,000 cars — until after the coronavirus crisis passes. But so far they’ve failed to get enough lenders on board.

In the meantime, Wall Street financiers and analysts crunching the numbers say the former category leader might be worth more if it were sold in parts. If its senior lenders holding some $3.4 billion in debt agree, Hertz could be forced into liquidation even if it plans to continue operating with the consent of lenders through a Chapter 11, sources said.

“It may be in the interest of the senior lenders to liquidate,” said one Wall Street researcher. “I think it is a real distinct possibility.”

The researcher thinks Hertz’s creditors could fetch more than $2 billion through piecemeal sales, including two profitable business units — the Donlen division, which manages vehicle fleets for large companies like Anheuser-Busch and PepsiCo, and its European car-rental arm.

Other assets, including real estate, trademarks and its fleet of cars, could score another $750 million — for a total of $2.25 billion, or 66 cents on the dollar for senior lenders, the researcher said.

The researcher asked to remain anonymous because his firm has a stake in Hertz’s bankruptcy, but Jefferies analyst Hamzah Mazari also believes Hertz creditors could get a pretty penny selling off parts of the company.

While Mazari’s total numbers are more conservative — at $1.6 billion — it’s still more than creditors might expect otherwise. “I think liquidation is a possibility,” the analyst told The Post.

Hertz, which boasts Icahn as a 39 percent stakeholder, could also seek a buyer for the whole shebang, but with the industry in the tank during the pandemic, it could be hard to find someone willing to fork over enough to please creditors.

“Right now, I don’t think anyone will write that check,” a Hertz lender told The Post, adding that at least $1.5 billion would be required for creditors to agree to the deal. “Whether someone will invest depends on what happens in the economy.”

Hertz generated roughly $650 million in earnings before taxes, interest, depreciation and amortization in 2019, but it’s expected to make far less in the coming months and even years as its customers, including many corporations, have been severely hampered by the coronavirus outbreak.

European car-rental company Sixt has been looking to expand in the US and could be a logical suitor, sources said. Sixt also could seek to buy the Hertz trademarks out of bankruptcy for far less, sources added.

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