Hertz scraps share sale plan after SEC scrutiny
Hertz Global Holdings Inc. called off efforts to raise cash by selling potentially worthless stock after U.S. regulators questioned its highly unusual approach to paying off creditors.
The bankrupt car renter’s board “determined that it was in the best interests of the company to terminate” the offering, according to a Thursday regulatory filing. Hertz said on Wednesday that the stock sale had been suspended while it dealt with issues brought up by Securities and Exchange Commission officials.
Hertz shares resumed trading after an hours-long halt and were down 10% to $1.80 as of 3:30 p.m. in New York. That’s a far cry from the $5.53 price at which the stock closed on June 8.[Hertz shares give back much of their post-bankruptcy rally]
The almost tenfold increase in the shares from 56 cents on May 26 initially spurred the company to approach a bankruptcy judge with plans to raise as much as $1 billion through an equity offering. It scaled back the sum after the price receded.