In a filing with the SEC, Hertz revealed that on Monday afternoon, it was informed by the Commission’s Division of Corporation Finance it intended to carry out a review of the prospectus supplement.
Hertz decided to suspend the sale of its common stock pending “further understanding of the nature and timing of the [staff's] review.”
The car rental firm says it is in regular contact with the SEC and is not currently offering any shares through an agent.
SEC Chairman, Jay Clayton, said that the commission had comments on Hertz’s disclosure Wednesday.
He told CNBC’s “Squawk on the Street” program, “In most cases when you let a company know that the SEC has comments on their disclosure, they do not go forward until those comments are resolved.”
Why It Matters
Hertz declared bankruptcy on May 22 and planned to use the proceeds of the sale of its shares to raise up to $1 billion. A stock rally had motivated the company to act quickly on the sale.
It had sought and received permission from a bankruptcy court to sell its potentially worthless shares on Friday.
The New York Stock Exchange begun the process of delisting Hertz.
On Tuesday, former SEC Chairman Harvey Pitt called on the SEC to ensure that Hertz and similar companies become “far more aggressive” in their disclosure.
Pitt also cautioned that investment banks working with Hertz “have liability” and need to do more.
Hertz Price Action
Hertz shares traded 4% lower at $1.92 in the after-hours session on Wednesday. The shares had closed the regular session 2.56% higher at $2.
See more from Benzinga
- Morgan Stanley Will 'Vigorously Defend' Accusations Of Systemic Bias By Bank's Former Diversity Chief In Court
- SpaceX Wants To Build Floating Spaceports To Send Rockets To The Moon And Mars
- DoorDash Sued For Flouting Gig-Worker Law
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.