Hertz suspends $500-million stock sale amid SEC scrutiny

NEW YORK: Hertz Global Holdings Inc suspended plans to raise cash by selling new shares that the bankrupt car renter described as potentially “worthless” after its proposal failed to pass muster with US regulators.

The company halted sales while it deals with issues brought up by SEC officials, according to a filing. The stock, whose trading had been halted earlier in the day, rose 5 cents to $2 Wednesday, while its bonds tumbled.

The action puts the brakes at least temporarily on the sale from which the company sought to raise as much as $500 million. The extra scrutiny comes amid a mania, especially among individual investors, for shares of bankrupt and near-bankrupt companies.


The enthusiasm has baffled professional traders because common shares typically get canceled at the end of the court process, leaving equity owners empty-handed.

The sale was “promptly suspended pending further understanding of the nature and timing of the staff's review,” Hertz said in its filing. The company said it's not currently offering shares and that its advisers have been in regular contact with the SEC.

A Hertz representative declined to comment.