Two private equity firms will commit to invest up to $4.2 billion in Hertz as the car hire firm aims to come out of Chapter 11 bankruptcy by mid-summer.

Hertz filed for bankruptcy protection in the US in May 2020 because of the impact of the pandemic.

Certares Opportunities and Knighthead Capital Management are co-sponsors of Hertz’s reorganisation plan filed in the US on Tuesday.

Hertz said in a statement that “it has reached a key milestone” in the company’s Chapter 11 process by filing its proposed reorganisation plan with the US Bankruptcy Court for the District of Delaware.

Knighthead and Certares will commit to invest up to $4.2 billion to purchase a controlling controlling equity stake in the reorganised Hertz.

“Overall, the proposed plan will enable Hertz to exit Chapter 11 stronger both financially and operationally,” said the statement.

Paul Stone, Hertz president and chief executive, said: “Our plan of reorganization provides us a clear path forward to completing our financial restructuring and emerging from Chapter 11 by early to mid-summer.

“The support of the plan sponsors demonstrates their confidence in Hertz’s growth potential; moreover, they bring valuable experience in the travel and leisure industry.

“We’ve been making excellent progress on our financial and operational initiatives and repositioning our business as we prepare for increased travel demand as the pandemic subsides.

“We believe Hertz will be well-positioned to resume growth and secure the long-term success of our iconic brand.”

Certares and Knighthead have recently formed the CK Opportunities Fund, a co-managed vehicle specifically dedicated to investments in travel and leisure.

Knighthead is a credit-investment management and Certares is a private investment platform dedicated to investing in the travel, tourism and hospitality sectors.