June 18, 2020 / 6:38 PM / 17 days ago

Car rental firm Hertz scraps plan to sell new shares

(Reuters) - Bankrupt Hertz Global Holdings Inc said on Thursday it terminated its plan to sell up to $500 million in new shares, a day after the U.S. Securities and Exchange Commission (SEC) raised objections to the sale.

"Effective June 18, the finance committee of the board of directors determined that it was in the best interests of the company to terminate the (share sale)," the U.S. car rental company said in a filing. (bit.ly/3fzhWgb)

Hertz on Wednesday suspended the sale after being verbally notified by the SEC of some issues with the plan.

Separately, the Wall Street Journal on Thursday reported that Hertz was in talks for a bankruptcy loan of up to $1 billion to fund its business reorganization, citing people familiar with the matter. (on.wsj.com/3fCTqL7)

Hertz won a bankruptcy court approval last week to sell up to $1 billion in stock and raise capital by taking advantage of a strong rally in its shares since filing for bankruptcy last month.

The company had warned that its shares would be eventually “worthless”, but the stock sale could benefit creditors seeking to recover more of their claims during the bankruptcy process.

Reporting by Ankit Ajmera in Bengaluru; Additional reporting by Bharath Manjesh; Editing by Shounak Dasgupta and Shinjini Ganguli

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