Planet42 sells off the South African car rental fleet to repay debts to institutional investors

Estonian car rental company Planet42 is selling off its South African car rental fleet to repay debts to institutional investors. In addition, Planet42 co-founders Eerik Oja and Marten Orgna have resigned from the board of directors under pressure from the investors.

The company is obligated to pay its debts in the following order: current expenses, secured loans issued from institutional investors, subordinated loans, and, finally, shareholders. Planet42's investors include Rivonia Road Capital, which provided a €75M loan, Standard Bank, which provided €16M in equity, Naspers, which invested $3.4M, and others.

The South African vehicle fleet and all cash flow from South Africa are collateral for the investors who have invested €60M in Planet42. According to Eerik Oja, they have demanded that the fleet be liquidated and that the balance sheet be reduced to zero. However, the company believes that it will take up to four years to meet these demands, and as a result, it will not be able to fully satisfy the demands of the Estonian creditors, who do not have the same priority as the institutional investors.

Founded in 2017 by Estonian entrepreneurs Eerik Oja and Marten Orgna, Planet42 buys used cars from a network of car dealers and connects them with customers. The platform works on a subscription basis, without the need to physically inspect or meet the customer. The startup helps clients who are unable to secure financing from traditional institutions to buy a car.