Hertz plans to increase cash flow and cut costs

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Hertz, the car rental giant, is anticipating further cost reductions and a boost in cash flow during 2009. It also sees opportunities to make acquisitions, according to a letter written by Clayton, Dubilier & Rice (CD&R), a private equity firm that is a large Hertz shareholder.

The letter from the major shareholder, which was obtained by Reuters, provided details of the 19 March conference call CD&R held with other investors.

In 2005, CD&R, along with Carlyle and Merrill Lynch Global Private Equity, took Hertz private, and then re-listed the company the following year.

Investor progress updates are routinely provided by private equity firms, but written communications are not made public. The letter from CD&R gave updates on its portfolio and noted that the firm sees opportunities for deals in the near term.

Other buyout firms, including the Blackstone Group, the Carlyle Group, Kohlberg Kravis Roberts & Co and TPG, have also recently provided updates to investors with their year-end numbers.

CD&R declined to comment on the contents of its letter.

In a section of the letter on Hertz, CD&R operating partner George Tamke was cited as saying that the rental car company was focused on cost actions and new cash flow initiatives.

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