Bankrupt Hertz has shelved plans to sell $ 500 million worth of stock amid scrutiny from the Securities and Exchange Commission.
Clayton also said he expected Hertz to put the transaction — which is highly unusual for a company that has filed for bankruptcy protection — on hold until the SEC’s comments had been addressed.
Hertz, which is based in Estero, Florida, said Monday that it received approval from the bankruptcy court to proceed with the stock sale. The move raised eyebrows given the potential threat to investors. In its prospectus for the offering, Hertz warned that investors who buy its shares face “substantial risks” and that the stock could ultimately prove worthless.
Hertz has $ 19 billion in debt and just $ 1 billion in cash — a significant hurdle as it seeks to restructure. Even so, its shares have more than doubled this month, rising slightly on Wednesday to $ 2 on the news that the offering has been delayed.