Cazoo has begun further proceedings to restructure its debt to reduce debt levels to ensure it can continue listing on the NYSE, according to a company statement.

Cazoo previously agreed terms with its bond holders in September to restructure its debt after concerns it may become liable to repurchase the $630 million of convertible notes, should it shares fall to a level where it could no longer trade on the NYSE.

It has now made an exchange offer for its convertible notes, which work in a similar way to an IOU and are used for short term debt financing. Investors are repaid with equity rather than money and interest.

Cazoo is now initiating a new process for existing holders of its convertible notes to exchange them for new secured notes and Class A ordinary shares in Cazoo. The company said 85% of the holders of its notes that are due in 2027 have already agreed to take part.

The new notes will be issued by Cazoo Group Ltd and are guaranteed by all its existing subsidiaries. Interest will accrue at 6% annually from the date of issue, with a minimum of 4% payable in cash and at the option of Cazoo, up to 2% payable in kind.

The decision to restructure Cazoo’s debt was taken after it received a written notice from the NYSE for failing to meet one of its rules of not having an average market cap below $50 million for 30 consecutive days of trading.

By falling below that level, Cazoo was at risk of having to buy back the $630 million of convertible notes should its shares no longer trade on the NYSE. The exchange offer expires at 11.59pm New York City time on December 4, 2023 (4.59am on December 5 in the U.K.).

Cazoo has announced an Extraordinary General Meeting of Shareholders on Tuesday November 21st at 3pm GMT.

 

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