Hertz has decided to terminate a controversial stock sale of up to $500 million following the Securities and Exchange Commission criticizing the bankrupt company’s plans.

The move immediately sent shares of Hertz falling about 10%. The stock briefly recovered before ending down 10% to $1.80 — its lowest closing price since June 4. Trading in the shares was halted for hours ahead of the announcement. Only 33.8 million shares changed hands during trading Thursday. The stock continue to slide during extended-hours trading.

Hertz is now in talks for a bankruptcy loan of up to $1 billion to fund its business reorganization, The Wall Street Journal reported on Thursday, citing people familiar with the matter.

The decision ends a week of debate about whether a bankrupt company such as Hertz should be allowed to sell shares that could ultimately end up being worthless.  

The company in a filing Thursday with the SEC said the finance committee of the Hertz Board of Directors “determined that it was in the best interests of the company to terminate” the sale.

Thursday was the second consecutive day Hertz stock has been forced to halt trading. The shares stopped trading for several hours Wednesday ahead of the company saying it was suspending the plan to sell up to $500 million in shares after the SEC voiced concern about the deal and launched a review. 

Hertz wanted to use the sale to leverage interest in its stock, which had seen volatile trading in the wake of its bankruptcy filing. The company felt it was a better option than obtaining so-called debtor-in-possession financing. DIP financing is a loan that the company would need to pay back. However, if it were to sell stock, the funds it raises would not need to be reimbursed. 

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Hertz filed for bankruptcy May 22 as demand for car rentals dried up as travelers have stayed home during the coronavirus pandemic. The stock hit a low of 40 cents intraday on May 26. But in the days that followed, it began to recover and eventually surged to more than $6 per share last Monday.

Following the increase, Hertz asked the bankruptcy court last Thursday to allow it to sell up to $1 billion in shares. The request was approved by the court Friday. Separately, it also appealed to the New York Stock Exchange not to delist its stock. 

Such a sale is highly unusual for a company going through Chapter 11 bankruptcy proceedings since common shareholders, who are last in line when assets are allocated during court proceedings, may be left with worthless stock.