Lenders of Cazoo, the British online car dealership, have engaged bankers to lead talks with the company over a £510 million debt restructuring.
Sky News understands that the holders of convertible bonds due in 2027 have engaged PJT Partners to advise them in negotiations with the company.
The talks were highlighted earlier this week by Cazoo in a statement to the New York Stock Exchange, where it is listed.
Cazoo’s share price performance since it went public in 2021 through a merger with Ajax I, a Special Purpose Acquisition Company (SPAC), has been disastrous.
Nevertheless, its operational performance has proven more robust, with the company declaring itself “very pleased” with its Q2 2023 sales.
Last year it pulled out of European markets to focus on the UK, while also seeking to reduce its cash burn by scaling back its string of high-profile sports sponsorship deals.
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The company was founded by Alex Chesterman, the founder of real estate portal Zoopla and one of Britain’s most successful entrepreneurs.
A person close to Cazoo pointed out that it had more than £200 million in cash on its balance sheet, meaning there was plenty of time to hold negotiations with bondholders.
Some analysts believe the debt restructuring talks are expected to be followed by an offer to delist the company.
Cazoo, which is advised by bankers at Goldman Sachs, declined to comment Friday.
