Cazoo cuts debt with restructuring support agreement; will issue notes, equity

Chicago, Sept. 20 – Cazoo Group Ltd. entered a restructuring support agreement “to materially reduce its debt and improve its capital structure,” according to a press release.

The company entered into a transaction support agreement representing more than 75% of its $630 million principal amount of 2% convertible senior notes due 2027 and shareholders representing 25% of the company’s outstanding shares.

Per the agreement, the company will cancel all $630 million of the convertibles and issue in exchange $200 million of new senior secured notes due February 2027, plus class A ordinary shares of the company which will represent 92% of the company’s outstanding class A shares.

Formally, there will be an exchange offer and the notes and shares will be offered to Rule 144A, Regulation S or Regulation D buyers.

If all of the noteholders fail to participate in the exchange offer, then the company will consummate the same plan through an English restructuring plan or an English scheme of arrangement.

The new notes will be listed for trading on the International Stock Exchange or another recognized stock exchange.

Existing class A shareholders will receive new warrants depending on the achievement of equity valuation hurdles.

In connection with the transactions, Cazoo will have a reorganized board with six of the seven members chosen by owners of the company’s convertible notes.

The transactions are expected to close in the fourth quarter.

Goldman Sachs International is serving as exclusive financial adviser and Freshfields Bruckhaus Deringer US LLP and Maples and Calder are serving as legal adviser to the company.

PJT Partners LP is serving as exclusive financial adviser and Weil, Gotshal & Manges LLP and Campbells LLP are serving as legal adviser to the noteholders.

Cazoo is a London-based online car retailer.

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