Hertz 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 regulators.
The company halted sales “pending further understanding of the nature and timing” of the regulatory review, according to a filing. The stock, whose trading had been halted earlier in the day, jumped to almost $US2.30 after the disclosure, and then slumped back to trade little changed at $US1.95 in late trade.
Hertz’s reversal followed inquiries from the US Securities and Exchange Commission about the plan advanced by the car renter, which sought to raise as much as $US500 million ($727 million). The company warned at least half a dozen times in its offering that would-be buyers could find themselves wiped out.
“We have let the company know that we have comments on their disclosure,” SEC Chairman Jay Clayton said in a CNBC interview on Wednesday.