Online used automotive dealership Cazoo has accomplished its debt restructuring programme after bondholders reached an agreement to exchange $630 million of debt for $200 million in bonds and shares.
The business said the brand new structure will now provide Cazoo with a much better financial foundation and sets the stage for its next chapter of growth – one without its controversial founder Alex Chesterman, nonetheless.
Paul Whitehead, the present CEO of Cazoo, said: “Completion of those transactions represents a major inflection point for Cazoo. With an improved capital structure and inspiring operational momentum, as demonstrated by our successive record retail GPU figures and much-improved unit economics, we will look to 2024 with confidence.”
Whitehead prolonged gratitude to Alex Chesterman, the outspoken founding father of Cazoo, who, as a part of this restructuring, is officially stepping down, marking the top of an era for the corporate.
The boardroom changes come as Cazoo goals to pursue strategic goals that include achieving profitable growth, securing a bigger share of the UK used automotive market, and exploring revolutionary initiatives to enhance its business model and brand.
Cazoo said its latest board will likely be headed by incoming chairman Tim Isaacs who brings expertise from having advised corporations across various sectors, including retail, healthcare, business services, and industrials.
Joining Isaacs on the brand new board are Alan Carr, an experienced investment skilled specialising in financially distressed corporations; Andrew Herd, a chartered accountant; Nicholas Pike, a solicitor and management consultant; and Mary Reilly, who has been a Cazoo director since February.
Cazoo, founded with the promise of revolutionising the car-buying experience through online sales, witnessed rapid growth by acquiring businesses akin to Imperial Automobile Supermarkets, vehicle prep sites, and automotive subscription corporations.
Vowing to rework how eight million used cars are bought every year by putting the whole process online, Cazoo launched its UK used automotive retail portal in late 2019 with pre-launch backing of £80 million and a stock of BCA-supplied 1,500 vehicles.
Chatting with AM shortly after its launch, Chesterman, who had often been critical of the normal dealership model, said: “The difference between us and certain others within the industry, if there’s one apart from digital versus physical dealership, is we’ve all the time been consumer-first in our pondering. I’ve all the time come at things from that perspective of what’s the most effective we could do for consumers.
“And regarding profitability down the road, we almost take the view that should you do an important job with the patron the opposite bits that matter will fall into place. You win repeat business, market share, you get great word of mouth, you construct trust, and all of those things should result in a profitable business. When you don’t do all of those stuff you won’t have business.”
Earlier this yr, Cazoo revealed the net used automotive retailer’s £704 million losses for 2022.
Revenues rose 91% to £1.25 billion because the business delivered 65,366 units throughout the 12-month period to December 31, however the Recent York Stock Exchange-listed operation’s losses racked up because it withdrew from Europe and cut its UK automotive handover network and headcount in an effort to deliver annual savings of £200 million.
Despite extensive marketing efforts and sponsorship deals, Cazoo struggled to realize profitability nonetheless, with its valuation plummeting from nearly $7 billion at its 2021 launch on the Recent York Stock Exchange.
Chesterman insisted in January that Cazoo’s three years of trading had demonstrated that there was “a major appetite for getting and selling cars online”, adding that its proposition was still “resonating strongly with consumers”
This Article First Appeared At www.am-online.com