Hertz Selects Centerbridge to Lead Its Reorganization From Bankruptcy

In the duel over which investment group would lead Hertz out of bankruptcy in June, Centerbridge Partners appears to have won.

However, the deal is subject to a bankruptcy court hearing April 16 in Delaware, and then creditor approval, so the possibility of further maneuvering isn’t foreclosed.

Hertz announced Saturday that it selected a renegotiated proposal from Centerbridge, Warburg Pincus and Dundon Capital Partners over a competing offer from Certares and Knighthead to fund the car rental firm’s bankruptcy exit.

In selecting the Centerbridge plan, after initially endorsing the Certares proposal in early March, Hertz noted that the Centerbridge reorganization scheme has the backing of the holders of more than 85 percent of its unsecured notes.

“The level of creditor support for the Sponsorship Group’s proposal gave it the clear advantage,” Hertz stated, referring to the Centerbridge plan.

Hertz also cited the Centerbridge-Warburg Pincus and Dundon Capital Partners Group’s “unique operational expertise as strategic partners to the company,” including in the “automotive, rental, and travel sectors with companies such as Santander Consumer USA, Dana Inc., and Car Trade.

Certares, too, has wide travel industry experience with enterrprises such as American Express Global Business Travel and Internova Travel Group, but its track record doesn’t appear to be as deep in the car rental and fleet management field as that of the Centerbridge group.

Both the Centerbridge and Certares plans would wipe out $5 billion in Hertz’s corporate debt, provide more than $2 billion in liquidity, and erase the corporate debt on Hertz’s European business.