Hertz Global Holdings said Tuesday it plans to offer $100 million of common stock in a SEC-registered transaction, but the company itself will not receive any of the proceeds.
The shares will be loaned by Hertz to J.P. Morgan Securities, which is acting as the share borrower in the offering. J.P. Morgan or its affiliates will receive the proceeds from the sale of the borrowed shares and will pay Hertz a nominal lending fee for their use. The borrowed shares must be returned to Hertz, or replaced with identical shares, under the lending agreement.
Hertz said the stock sale is tied to a separate private offering of exchangeable senior first-lien secured PIK notes due 2030 that Hertz Corp. plans to sell to qualifying investors. The stock offering is contingent on the closing of that debt deal, while the debt offering is not dependent on the stock sale.
The company said the borrowed shares may be used to help investors in the notes hedge their positions through short sales or privately negotiated derivatives. Hertz also said that activity could affect the market price of its common stock.
Hertz operates more than 11,000 rental locations across 160 countries under the Hertz, Dollar, Thrifty and Firefly brands, and also runs Hertz Car Sales and Hertz 24/7 in Europe. Following these announcements, the company's shares moved -27.37%, and are now trading at a price of $3.675. Check out the company's full 8-K submission here.
