U.K.-based digital auto retailer Cazoo has completed a number of restructuring transactions, including a convertible note exchange. This has “significantly de-levered” the company, it asserted in a press release. This will enable Cazoo to retain its listing on the NYSE.

The transactions involved “the exchange of $630 million aggregate principal amount of 2.00% Convertible Senior Notes due 2027 for a pro rata portion of (1) $200 million aggregate principal amount of 4.00%/2.00% cash/payment-in-kind toggle senior secured notes due 2027 and (2) 4,499,721 Class A ordinary shares of Cazoo, which represents approximately 92% of the 4,891,002 Class A ordinary shares estimated to be outstanding as of December 6, 2023.”

The restructuring plan was agreed with bondholders in September and approved by shareholders last month.

Cazoo CEO Paul Whitehead commented: “Completion of these transactions represents a significant inflection point for Cazoo. With an improved capital structure and encouraging operational momentum, as demonstrated by our successive record retail GPU [gross profit per unit] figures and much-improved unit economics, we can look to 2024 with confidence … Cazoo launched only four years ago this week and has already sold almost 150,000 cars entirely online to consumers across the U.K.”

Four out of five directors ‘retire’

The company has also unveiled a new board, with four of its five existing members — including the company’s founder and former CEO Alex Chesterman — ‘retiring.’

The board will now be chaired by Tim Isaacs, an accountant with equity fund management investment experience. According to his LinkedIn bio, “I help lenders, private equity firms and portfolio companies navigate complex and challenging scenarios, such as refinancing, restructuring, performance improvement, mergers and acquisitions and asset disposal.”

Isaacs will be joined by Alan J. Carr, CEO of independent fiduciary services provider Drivetrain and a self-described “distressed investing and corporate renewal professional”; Andrew Herd, managing director of consulting and investment company Lancashire Court Capital Limited; and Nicholas Pike, a former partner in law firm DLA Piper who now runs a management consultancy that specializes in board appointments to assist with governance and strategy.

All four were appointed on Dec 6. They join Mary Reilly — the only existing board member to continue in her role. She joined the company in February this year.

Cazoo’s decline has been precipitous; when it floated on the NYSE in a SPAC deal in August 2021, it was worth around $8.0 billion. At the time of writing, its market cap stood at just $11.7 million — a 99.9% decline in less than two-and-a-half years.

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