Shares of bankrupt car-rental company Hertz Global Holdings Inc. soared 55% in afternoon trade Wednesday, after the company said it has selected and approved a revised proposal from Knighthead Capital Management LLC, Certares Opportunities LLC and Apollo Capital Management to provide the equity capital to allow it to exit Chapter 11. The $6 billion bid will fund Hertz’s Chapter 11 plan through direct stock investments from the group of $2.781 billion, the issuance of $1.5 billion of new preferred stock to Apollo, and a fully backstopped rights offering to the company’s existing shareholders to purchase $1.635 billion of additional common stock, Hertz said in a statement. “The revised plan would provide for the payment in cash in full of all administrative, priority, secured, and unsecured claims in the Chapter 11 cases and would deliver significant value to the Company’s existing shareholders,” said the statement. That includes $239 million of cash, common shares equal to 3% of the shares of the reorganized company, 30-year warrants for 18% of the stock of the reorganized company with a strike price based on a total equity value of $6.5 billion or the chance for eligible shareholders to subscribe in the rights offering. That is good news for Reddit investors who last year started to buy the shares of the bankrupt company, even though at that time, the equity stood a chance of being fully wiped out. A rival group including Centerbridge Partners, Warburg Pincus LLC, Dundon Capital Partners, LLC and an ad hoc group of the Company’s unsecured bondholders were also vying to fund Hertz’s exit from bankruptcy. Hertz shares are up 343% in the year to date.

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