Home Business NewsBusinessAutomotive News UK’s leading independent online car retailer agrees restructuring deal

UK’s leading independent online car retailer agrees restructuring deal

by LLB Reporter
20th Sep 23 12:34 pm

Cazoo Group who are the UK’s leading independent online car retailer, which makes buying and selling a car as simple as ordering any other product online.

Cazoo has announced the Company has entered into a transaction support agreement with certain noteholders representing more than 75% of its $630 million aggregate principal amount of 2.00% Convertible Senior Notes due 2027 and shareholders representing more than 25% of our outstanding shares.

The transactions and actions proposed by the Agreement will significantly deleverage the Company’s capital structure and are expected to improve the Company’s financial flexibility.

The Company expects the Transactions to close in the fourth quarter of 2023.

It is the view of the board of directors of Cazoo that the material debt reduction offered by the Transactions is beneficial to the Company’s future.

Cazoo’s current capital structure weighs on the Company’s equity notwithstanding its strong cash balance and recent progress towards its goal of profitable growth.

Deleveraging will reduce the Company’s current debt overhang, is expected to improve the Company’s financial flexibility to support its return to growth, should improve the Company’s ability to meet the NYSE continued listing standards and should facilitate progress on various strategic options.

While the Transactions will dilute existing Cazoo shareholders, the Transactions provide for potential future upside through the equity retained by existing shareholders and the issuance of new warrants to existing shareholders.

Alex Chesterman, Founder and Executive Chairman of Cazoo said, “Today’s agreement represents an opportunity to significantly deleverage Cazoo’s capital structure and enhance the financial flexibility Cazoo needs in order to achieve profitable growth.

“As our results for the first half of this year show, we are making good progress on improving our unit economics and reducing our fixed costs, bringing us closer to our objective of achieving profitable growth and capturing a higher share of the significant UK used car market.

“Cazoo’s stronger balance sheet, if the Transactions are implemented, is expected to strengthen our ability to raise additional finance and the deleveraged capital structure will enable us to explore potential strategic initiatives to complement the Cazoo business model and brand.

“The Agreement is a major milestone for Cazoo and the Board recommends shareholders vote in favor of the proposals.”

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