By Becky Yerak and Peg Brickley

Rival groups of investors are vying for the right to back the expected recovery of Hertz Global Holdings Inc.'s car-rental business and ease a path out of bankruptcy.

One offer was already on the table when a group led by Centerbridge Partners LP, Warburg Pincus LLC and Dundon Capital Partners stepped up with a competing funding package meant to lift the rental car provider out of bankruptcy.

In court papers filed Monday, Hertz said the new offer is competitive with a proposal the company had previously floated to emerge from bankruptcy under the control of Knighthead Capital Management LLC, Certares Management LLC and other co-investors.

"This competitive process remains ongoing," Hertz said, noting that neither group has fully committed to a final deal.

An early casualty of the travel-deadening effects of the coronavirus pandemic, Hertz filed for chapter 11 protection in May 2020, its fleets idled and its future prospects uncertain. The competing offers to shepherd the company out of chapter 11 cap months of financing and deal maneuvers that kept Hertz going.

Both offers would pay off in full and in cash all senior claims, including bankruptcy financing and first- and second-lien debts, court papers said.

Hertz doesn't envision that current shareholders will receive any compensation, dashing hopes from individual investors that piled into the company last June, touting the stock online despite the bankruptcy in an episode that presaged the trading mania around GameStop Corp.

Hertz said it estimated that unsecured bondholders owed $2.9 billion would recover 80 cents or 75 cents on the dollar under the Knighthead-led and Centerbridge-led restructuring plans, respectively. The precise amount that general unsecured creditors would recover is still unknown, according to papers filed in the U.S. Bankruptcy Court in Wilmington, Del.

"Either of these transactions would leave reorganized Hertz with a strong and sustainable balance sheet," the company said.

Any transaction selected by Hertz would require approval from the judge overseeing its bankruptcy and subjected to a creditor vote. The company has said it wants to leave bankruptcy by the end of June, eager to take advantage of favorable market conditions for debt financing by riskier borrowers.

Hertz said Centerbridge has experience in the automotive, rental and travel sectors, including serving as a plan sponsor in the chapter 11 case of auto-parts maker Garrett Motion Inc. and making investments in rental and fleet-management platforms. Vehicle-related investments made by Warburg Pincus include China Auto Rental, Santander Consumer USA, online used car dealer Uxin, and auto transaction platform Cango Inc.

Certares and Knighthead formed an investment vehicle last year to back travel and leisure businesses. During the pandemic, Knighthead has invested in Chilean airline Latam Airlines Group SA and, along with Certares, Brazilian airline Azul SA.

Hertz entered bankruptcy with roughly $19 billion in debt when lockdown orders and fear of contagion curbed air and ground travel for business and leisure, sending Hertz's global revenue down 70% in April 2020 compared with a year earlier. Used-car values, a pillar of the business, also declined.

To reduce costs, Hertz consolidated rental locations, negotiated with airports to defer payments and laid off roughly 11,000 U.S. employees, most of whom were previously furloughed.

Hertz's push to leave bankruptcy comes after the rental-car industry experienced a rebound at the end of last year as more travelers chose to take road trips and used-vehicle values increased due to tighter supplies.

Hertz, which also owns the Thrifty and Dollar brands, has projected that revenue will rise from nearly $6.1 billion this year to $8.6 billion in 2023 as more individuals get vaccinated against Covid-19 and travel picks back up.

Write to Becky Yerak at becky.yerak@wsj.com and Peg Brickley at peg.brickley@wsj.com

(END) Dow Jones Newswires

03-30-21 1041ET