Hertz said it was a final effort for the company to take advantage of its volatile stock price as it struggled with the New York Stock Exchange not to be delisted. Bankrupt car rental shares fell about 7% during extended trading hours after jumping 37.4% on Friday to close at $ 2.83. More than 240 million shares changed hands on Friday.
The sale approval comes a day after Hertz filed an emergency court case on Thursday asking for permission to sell potentially 246.8 million unissued shares to Jefferies LLC.
“Recent market prices and trading volumes of Hertz common shares potentially present a unique opportunity for debtors to raise capital on terms far above any debtor financing in possession,” the company said in the record, that the court has not yet made a decision concerning.
The court, in its ruling, said that the approval “will in no case result in the issue” of actions. Debtors are authorized, but not required, to sell common shares.
The company could not immediately be reached for comment.
Hertz said the net proceeds would be used for general working capital purposes. The filing was on an “emergency basis given the volatility of trading in Hertz shares”.
Added to volatility is the potential for delisting from the stock. Hertz, in a public file filed with the Securities and Exchange Commission this week, said he had appealed a request to deregister on the New York Stock Exchange.
Melanie Cyganowski, a former bankruptcy judge in the eastern district of New York, who is now a member of the Otterburg law firm, told CNBC if the company was selling the shares that future bankrupt companies could consider doing. likewise. But because of what is happening in such “unusual” circumstances, she does not think the case will set a significant precedent.
This is a last minute story. Please check back for updates.