Auto industry

While all travel-related companies have been hurt by the pandemic, a big part of what’s weighing on Hertz is its strategy of owning or leasing a large portion of its fleet outright instead of acquiring them through buyback agreements with manufacturers.

The Italian-American carmaker is seeking to shore up liquidity after burning through $5.5 billion in the first quarter while its North American plants were shuttered and new-car demand stalled.

Automotive aftermarket retailers are currently scrambling to launch or improve their e-commerce offerings with brick-and-mortar stores being closed. This is creating deal opportunities for PE firms such as Kian Capital.

Jaguar Land Rover plans to spinoff its cars business, while deals involving BorgWarner and Asbury Automotive get impacted, as demand for vehicles drops.

Asbury Automotive calls off its deal for Jaguar dealership operator Park Place, citing a drop in sales from the coronavirus. Diamond Offshore goes bankrupt, as oil prices crash. PE firms compete to invest in distressed companies.

Several high-profile deals have fallen apart during the quarantine, and more are expected to fail.

BorgWarner issues warning to Delphi about the latter drawing from its credit facility, as fears of the coronavirus spreads. The two companies are working towards closing a deal. On the middle market side, we check in with dealmakers from Alvarez & Marsal, Riverside, M33 Growth and Paul Hastings about the potential impact.

Delphi drew down its full $500 million revolving credit facility to position for the downturn related to the coronavirus pandemic.

“The recent outbreak of Covid-19 virus increases the challenges faced by the business,” Tata Motors says in a statement.

For risk managers, Covid-19 presents a stark reminder of the need to prepare for threats proactively.