May 26 2020. Why Even Carl Icahn Couldn't Save Hertz From Chapter 11 - Bloomberg
Hertz’s debt binge began when it was acquired by private equity firms from Ford Motor Co. in 2005; the new owners quickly took out a \$1 billion dividend. Piling on debt juiced the potential returns for the owners and helped pay the inflated \$2.3 billion price tag for the Dollar and Thrifty brands in 2012, which Hertz struggled to integrate.
Doesn't the embolded sentence above contradict the one below? Wouldn't debt lower potential returns, if you can't re-pay it and the interest?
Oct 16 2006. Hertz share sale raises \$1.32 billion - The New York Times
Hertz Global Holdings has raised \$1.32 billion in one of the largest initial public offerings of the year, less than 12 months after private- equity firms bought the company, according to an underwriter.
The offering of more than 88 million shares, which represents about a 27.5 percent stake in the company, sold Wednesday for \$15 per share. Hertz said last month that it hoped to sell shares for \$16 to \$18 each.
Clayton Dubilier & Rice, Carlyle Group and Merrill Lynch put up \$2.3 billion of the \$15 billion including debt that they paid for Hertz in December. The firms rattled potential investors by adding debt, raising the company's interest costs and pushing down profit.
"The offering wasn't in high demand, or they wouldn't have had to lower the price in order to get it sold," said Kevin Miller, a partner at Alston & Bird in New York. "This thing isn't going to pop."