Hertz Global Holdings said it plans to raise $100 million through a common stock offering structured around borrowed shares.
The company said the shares will be loaned to J.P. Morgan Securities, which will act as one of the underwriters. Hertz said it will not receive any of the offering proceeds. Instead, the share borrower or its affiliates will receive the proceeds and will pay Hertz a nominal lending fee for the use of the shares.
The company said the borrowed shares are tied to a separate private offering of exchangeable senior first-lien secured PIK notes due 2030 by Hertz’s wholly owned indirect subsidiary, Hertz Corp. The stock offering is contingent on the closing of that notes deal, while the notes offering is not contingent on the stock sale.
Hertz said the share borrower intends to sell the borrowed shares and use the resulting short position to help investors in the notes hedge through short sales or privately negotiated derivatives transactions.
The company said the borrowed shares offering could affect the market price of its common stock. Following these announcements, the company's shares moved -37.85%, and are now trading at a price of $3.145. Check out the company's full 8-K submission here.
