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Debt and coronavirus push Hertz into bankruptcy protection, Technology News, ETtech

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Debt and coronavirus push Hertz into bankruptcy protection
Hertz filed for bankruptcy protection Friday, unable to withstand the coronavirus pandemic that has crippled global travel and with it, the heavily indebted 102-year-old car rental company’s business. The Estero, Florida-based company’s lenders were unwilling to grant it another extension on its auto lease debt payments past a Friday deadline, triggering the filing in U.S. Bankruptcy Court in Delaware.

By the end of March, Hertz Global Holdings Inc. had racked up $18.7 billion in debt with only $1 billion of available cash.

Starting in mid-March, the company – whose car-rental bands also include Dollar and Thrifty – lost all revenue when travel shut down due to the novel coronavirus, and it started missing payments in April. Hertz has also been plagued by management upheaval, naming its fourth CEO in six years on May 18.

“No business is built for zero revenue,” former CEO Kathryn Marinello said on the company’s first-quarter earnings conference call May 12. “There’s only so long that companies’ reserves will carry them.” In late March, Hertz shed 12,000 workers and put another 4,000 on furlough, cut vehicle acquisitions by 90% and stopped all nonessential spending. The company said the moves would save $2.5 billion per year.

But the cuts came too late to save Hertz, the nation’s No. 2 auto rental company founded in 1918 by Walter L. Jacobs, who started in Chicago with a fleet of a dozen Ford Model Ts. Jacobs sold the company, initially called Rent-A-Car Inc., to John D. Hertz in 1923.

In a note to investors in late April, Jefferies analyst Hamzah Mazari predicted that rival Avis would survive the coronavirus crisis but Hertz had only a 50-50 chance “given it was slower to cut costs.” On May 18, Hertz took the unusual step of naming operations chief Paul Stone as CEO and announced that Marinello would step down as CEO and from the company’s board.

Mazari called the change unusual just days before a potential bankruptcy filing. He also noted that CEO changes have been common at Hertz since financier Carl Icahn entered the company in 2014.

Icahn’s holding company is Hertz’s largest shareholder, with a 38.9% stake in the company, according to FactSet.

Deutsche Bank analyst Chris Woronka credited Marinello with reigniting Hertz’s revenue growth, writing in a note to investors that it rose 16% in 2018 and 2019 combined.

Hertz’s bankruptcy protection filing was hardly a surprise. In its first-quarter report filed earlier in May with securities regulators, the company said it may not be able to repay or refinance debt and may not have enough cash to keep operating.

“Management has concluded there is substantial doubt regarding the company’s ability to continue as a going concern within one year from the issuance date of this quarterly report,” it said.

Under a Chapter 11 restructuring, creditors will have to settle for less than full repayment, but the company is likely to continue operating. Hertz isn’t the first struggling company to be pushed into bankruptcy by the coronavirus crisis. The company joins department store chain J.C. Penney, as well as Neiman Marcus, J.Crew and Stage Stores. (AP) RS RS



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Rebel Foods brews a new food kits plan, Technology News, ETtech

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Rebel Foods brews a new food kits plan
Rebel Foods, India’s largest cloud kitchen chain, which operates Faasos, Oven Story, Firangi Bake, and Behrouz, is planning to use its kitchen infrastructure to expand beyond its own cooked meal brands, a top executive told ET.

This will be done by diversifying into ready-to-cook kits, meats, packaged snacks, as well as scaling other restaurants by investing in 12 brands this year, Jaydeep Burman, CEO of Rebel Foods, said in an exclusive interaction with ET.

The food company speculated to be valued at about $1billion, said growth in India is increasing by 10% every week, but it is still slow compared to international markets and may take five months at least to reach numbers seen before the Covid-19 outbreak.

“(In India) I think there’ll be a natural tendency towards more at-home cooking and consumption…We are creating an umbrella under a program called Eat.Sure and giving this platform for other food entrepreneurs to come on board and build brands around ready-to-cook, ready-to-eat, ready-to-use, and so on,” Burman told ET.

The idea is to extend cases beyond restaurants and create products for customers for use in homes. “ We will be onboarding brands which adhere to the overall principle of great ingredients, no adulteration, no preservatives, no added color, …follows hygiene protocol and so on,” he said.

Globally, demand for food delivery apps have spiked since dine-in is no longer an option.

However, in India, people have started cooking at home fearing they would be infected if they go out, Burman said. Since this trend is likely to last, expansion to adjacent complementary categories was the need of the hour, he added.

The move will give Rebel Foods an opportunity to leverage its existing kitchen infrastructure across 35 cities to add new use cases for consumers at a time when food delivery volumes at dominant players Swiggy and Zomato are down by at least 70% and only marginally increasing over weeks.

It also comes at a time when both platforms have significantly downsized their cloud kitchen infrastructure citing poor utilization of properties. “In times of crisis, people gravitate towards their core competence…which for many of these guys (Swiggy and Zomato) has been logistics, marketplace models, delivery,” Burman said. “We run a much tighter, more efficient ship.”

According to him, even when Rebel Foods’ revenues were down by 50%, the company did not face challenges to its survival.

In April, Rebel raised an additional $50 million from existing investor, US-based hedge fund Coatue Management. This came in months after the Mumbai based firm closed a $125 million round from Coatue along with the participation from the investment arms of ride-hailing major GoJek and Goldman Sachs.

International expansion:

The company will, however, continue to launch in new geographies including Saudi Arabia, Brazil, and Thailand by partnering with restaurants that already have a strong connection with consumers but struggle with online ordering, he said.

“We are actually seeing significant partnership opportunities across the world. And these are all sorts of incoming queries to us, like — ‘can you help us, can you help us pivot to a cloud kitchen model where we can have our own brands as well as your brand, using your technology and you know how to scale fast?’.”

“Nothing is concrete yet, but the opportunity has opened up, which was not there before Covid-19,” Burman said.

In UAE, Rebel said its sales are up 25% citing that culturally a lot of UAE expats don’t cook at home. Even in Indonesia, the firm only saw a 15% drop in sales while India was down more than 50%. Just last week, Rebel partnered with Travis Kalanik owned-Cloud Kitchens to launch operations in London. “Any new market we go to, we try to collaborate like for example in London we’re actually operating out of FoodStart Kitchen…In India we don’t see it happening as much because we are still at that footprint,” he said.

Even as businesses diversify, health, and hygiene will continue to remain the top priority across the food delivery space. “People are more cautious about safety, hygiene, ingredients, the overall quality, than ever. So maybe pre COVID, pricing, discounts, variety used to play a big role. I’m sure some of that will continue. But safety, security would probably be the most important thing,” he said.



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Belgian rail tests sensors to keep workers apart during COVID-19- Technology News, Firstpost

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 Belgian rail tests sensors to keep workers apart during COVID-19

By Clement Rossignol and Francois Lenoir

BRUSSELS (Reuters) – Belgium’s railways are testing smart cameras with sensors to ensure its workers wear masks and maintain their distance to stop the spread of the coronavirus.

From next week, so-called intelligent cameras will be installed in five strategic points in the offices of Belgian rail infrastructure operator Infrabel, where technicians would normally come together, such as the cafeteria.

A warning will sound if people are too numerous, do not have a face mask or get too close.

“We must ensure that our staff complies with the various social distancing guidelines. This is why we are setting up a number of devices based on artificial intelligence,” Benoit Gilson, Infrabel’s strategy director, told Reuters on Monday.

Using AI software available online, Infrabel said it had developed a way to interpret camera images for the purpose of COVID-19 protection. The company will employ an algorithm to calculate if workers are too close or wearing a face mask.

In a demonstration on Monday, staff seen on camera were shown on a giant screen as stick figures whose distance apart could be measured in metres. On another screen, a camera detected if a worker entering a room was wearing a mask.

“The whole issue of distance (between individuals) is (managed by) a mathematical model that we developed,” said Daniel Degueldre, head of Infrabel’s information technology team.

The company, which has 11,000 employees, said it had already been working on ways to use sensors to protect technicians working on the Belgian railways by placing cameras on helmets that would alert staff in an accident.

That know-how was reappraised to fight coronavirus.

Responsible for Belgium’s 3,602 km (2,238 miles) of rail lines, Infrabel manages one of the world’s most dense rail networks.

(Writing by Robin Emmott; Editing by Giles Elgood)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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airport: COVID-19: Bengaluru airport introduces ‘contactless journey’ – Latest News

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Bengaluru, May 24 () The Bengaluru airport management is introducing a unique feature of parking-to-boarding contactless journey for the passengers as the domestic flight resumes from Monday. In order to contain coronavirus transmission among passengers and staff, the Bangalore International Airport Limited (BIAL) introduced the new feature of contactless journey right from pre-entry check to security check and boarding.

“Contactless would be the buzzword at the Kempegowda International Airport, Bengaluru when operations resume from May 25,” the BIAL said in a statement on Sunday.

With greater emphasis on minimum touch and minimum exposure between passengers and airport personnel, BIAL aims to minimise all physical contact at the airport.

The technology will continue to enable a seamless airport journey, with greater emphasis on health and safety, the statement said.

“We have introduced innovative contactless procedures to minimise exposure at the airport,” Hari Marar, managing director and chief executive officer of BIAL, said. “These enhancements demonstrate our continued commitment to keep our passengers safe in this environment.”

According to the BIAL, the features include pre-entry process, where the passengers have to wear masks and carry e-boarding or printed passes.

The travellers will undergo thermal scan and will have to show that the Aarogya Setu app on the passengers mobile phone has the ‘you-are-safe’ message.

“CISF personnel will verify the boarding pass and Government-issued Photo ID using an electronic device or through a magnified glass screen,” it said.

The doormats will be soaked with bleach at the terminal entrance to disinfect the shoes, the BIAL said.

There will be contactless self-service kiosk where the passengers will collect the baggage tag before proceeding to the airline counter to drop-off luggage.

A transparent partition has been installed at the airport, to ensure the safety of both airline staff and passenger at the airline bag drop counters.

Under the new contactless process, body scanning will be done using door frame metal detectors.

Stamping of the boarding pass has been suspended, as directed by the Directorate General of Civil Aviation, the BIAL said.

Before boarding, the airline staff will once again do thermal screening and then permit boarding.



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