ESTERO, Fla., May 24, 2016 /PRNewswire/ -- Hertz Global
Holdings, Inc. (NYSE: HTZ) ("Hertz Global" or the "Company") today
announced that its wholly owned subsidiary Hertz Equipment Rental
Corporation ("HERC") has formed two new wholly owned subsidiaries,
Herc Spinoff Escrow Issuer, LLC and Herc Spinoff Escrow Issuer,
Corp. (collectively, the "Escrow Issuers"). These new
subsidiaries were formed with the intention of offering
$1.1 billion aggregate principal
amount of senior secured second priority notes due 2022 (the "2022
Notes") and senior secured second priority notes due 2024 (the
"2024 Notes" and, together with the 2022 Notes, the "Notes") in a
private offering exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), subject
to market and other conditions. Each series of Notes will pay
interest semi-annually in arrears. The final terms of each series
of Notes will be determined at the time of pricing of the
Notes.
Concurrently with the closing of the offering, the gross
proceeds (plus an amount related to interest that would accrue on
the Notes through a specified date) will be deposited into an
escrow account. Following the release of proceeds from escrow
upon satisfaction of the escrow conditions, the net proceeds are
intended to be used to (i) finance the proposed separation of
the Company's global equipment rental business (the "Spin-Off") and
(ii) pay fees and other transaction expenses in connection
with the Spin-Off transactions.
Upon release of the proceeds of the offering from escrow upon
satisfaction of the escrow conditions, HERC will assume the Escrow
Issuers' obligations under each series of Notes and, in connection
with the consummation of the Spin-Off, each series of Notes is
expected to be guaranteed on a senior secured second priority basis
by the domestic subsidiaries of HERC that guarantee HERC's new
asset based revolving credit facility.
If the escrow conditions are not satisfied on or prior to
June 30, 2016 (subject to extension
by the Escrow Issuers to no later than December 31, 2016, pursuant to the terms of the
escrow agreement to be entered into upon closing of the offering),
or upon the occurrence of certain other events, the Escrow Issuers
will be required to redeem each series of Notes in full at a price
equal to 100% of the applicable initial issue price of such Notes,
plus accrued and unpaid interest from the date of issuance of such
Notes up to, but excluding, the payment date of such mandatory
redemption.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any of the Notes (and the
guarantees of the Notes) or any other securities, nor will there be
any sale of the Notes (or any guarantees of the Notes) or any other
securities in any state or other jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or other
jurisdiction. The Notes (and the guarantees of the Notes) will be
offered and sold in reliance on an exemption from the registration
requirements provided by Rule 144A under the Securities Act of 1933
(the "Securities Act") and to investors outside the United
States pursuant to Regulation S under the Securities
Act. None of the Notes and such guarantees have been
registered under the Securities Act or the securities laws of any
state or other jurisdiction, and the Notes (and such guarantees)
may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act and the securities laws of any
applicable state or other jurisdiction.
About Hertz Equipment Rental Corporation
Founded in 1965, HERC, which plans to be known as Herc Rentals
Inc. following its separation from Hertz Global, is one of the
leading equipment rental suppliers in North America with approximately 280
company-operated branches, of which approximately 270 are in
the United States and Canada.
Cautionary Note Concerning Forward Looking Statements
Certain statements contained in this release include
"forward-looking statements." Forward-looking statements include
information concerning the Company's liquidity and its possible or
assumed future results of operations, including descriptions of its
business strategies. These statements often include words such as
"believe," "expect," "project," "potential," "anticipate,"
"intend," " plan," "estimate," "seek," "will," "may," "would,"
"should," "could," "forecasts" or similar expressions. These
statements are based on certain assumptions that the Company has
made in light of its experience in the industry as well as its
perceptions of historical trends, current conditions, expected
future developments and other factors it believes are appropriate
in these circumstances. The Company believes these judgments are
reasonable, but you should understand that these statements are not
guarantees of performance or results, and the Company's actual
results could differ materially from those expressed in the
forward-looking statements due to a variety of important factors,
both positive and negative, that may be revised or supplemented in
subsequent reports we file with the SEC.
Among other items, such factors could include: the effect of the
debt markets on the offering; the Company's ability to satisfy the
closing conditions to the offering; any claims, investigations or
proceedings arising as a result of the restatement of our
previously issued financial results; our ability to remediate the
material weaknesses in our internal controls over financial
reporting; the effect of our proposed separation of HERC and
ability to obtain the expected benefits of any related transaction;
levels of travel demand, particularly with respect to airline
passenger traffic in the United States and in global
markets; significant changes in the competitive environment,
including as a result of industry consolidation, and the effect of
competition in our markets on rental volume and pricing, including
on our pricing policies or use of incentives; an increase in our
fleet costs as a result of an increase in the cost of new vehicles
and/or a decrease in the price at which we dispose of used vehicles
either in the used vehicle market or under repurchase or guaranteed
depreciation programs; occurrences that disrupt rental activity
during our peak periods; our ability to achieve and maintain cost
savings and efficiencies and realize opportunities to increase
productivity and profitability; our ability to accurately estimate
future levels of rental activity and adjust the size and mix of our
fleet accordingly; our ability to maintain sufficient liquidity and
the availability to us of additional or continued sources of
financing for our revenue earning equipment and to refinance our
existing indebtedness; our ability to realize the operational
efficiencies of the acquisition of Dollar Thrifty Automotive Group,
Inc.; our ability to maintain access to third-party distribution
channels, including current or favorable prices, commission
structures and transaction volumes; an increase in our fleet costs
or disruption to our rental activity, particularly during our peak
periods, due to safety recalls by the manufacturers of our vehicles
and equipment; changes to our senior management team; a major
disruption in our communication or centralized information
networks; financial instability of the manufacturers of our
vehicles and equipment, which could impact their ability to perform
under agreements with us and/or their willingness or ability to
make cars available to us or the rental car industry on
commercially reasonable terms; any impact on us from the actions of
our franchisees, dealers and independent contractors; our ability
to maintain profitability during adverse economic cycles and
unfavorable external events (including war, terrorist acts, natural
disasters and epidemic disease); shortages of fuel and increases or
volatility in fuel costs; our ability to successfully integrate
acquisitions and complete dispositions; our ability to maintain
favorable brand recognition; costs and risks associated with
litigation and investigations; risks related to our indebtedness,
including our substantial amount of debt, our ability to incur
substantially more debt and increases in interest rates or in our
borrowing margins; our ability to meet the financial and other
covenants contained in our Senior Credit Facilities, our
outstanding unsecured Senior Notes and certain asset-backed and
asset-based arrangements; our ability to successfully outsource a
significant portion of our information technology services or other
activities; changes in accounting principles, or their application
or interpretation, and our ability to make accurate estimates and
the assumptions underlying the estimates, which could have an
effect on earnings; changes in the existing, or the adoption of new
laws, regulations, policies or other activities of governments,
agencies and similar organizations where such actions may affect
our operations, the cost thereof or applicable tax rates; the
effect of tangible and intangible asset impairment charges; our
exposure to uninsured claims in excess of historical levels;
fluctuations in interest rates and commodity prices; and our
exposure to fluctuations in foreign exchange rates.
Additional information concerning these and other factors can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, and in the
Form 10 registration statement filed by Hertz Rental Car Holding
Company, Inc.
You should not place undue reliance on forward-looking
statements. All forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in
their entirety by the foregoing cautionary statements. All such
statements speak only as of the date made, and the Company
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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SOURCE Hertz Global Holdings, Inc.