Bankrupt Hertz Global Holdings Inc on Wednesday suspended its plan to sell up to $500 million in new shares after the U.S. Securities and Exchange Commission (SEC) raised objections to the sale, the car rental firm said on Wednesday.
The move comes after SEC Chairman Jay Clayton told CNBC television that the agency has some issues with Hertz’s share sale plan, without elaborating on what the problems were.
“After discussions with the (SEC) staff, sales under the…program were promptly suspended pending further understanding of the nature and timing of the staff’s review,” Hertz said in a filing.
Last week, Hertz won bankruptcy court approval to sell up to $1 billion in stock. It announced on Monday plans to sell up to $500 million in new shares, as it takes advantage of a strong rally in its stock since filing for bankruptcy last month.
Hertz has 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.