Freshfields has advised Cazoo Group Ltd (NYSE), the UK’s leading independent online car retailer, in a series of restructuring transactions which significantly deleveraged the company’s capital structure. The transactions were supported by 100% of Cazoo’s convertible noteholders and approved by Cazoo’s shareholders at a special meeting.
The transactions included an exchange offer in which $630 million aggregate principal amount of Cazoo’s 2.00% convertible senior notes due 2027 were exchanged for (1) $200 million principal amount of Cazoo’s newly issued senior secured notes due 2027 and (2) newly issued Class A ordinary shares representing 92% of the company’s outstanding Class A ordinary shares.
In addition, Cazoo’s pre-transaction shareholders retained 8% of the post-transaction Class A ordinary shares outstanding and received three tranches of new warrants which are exercisable depending upon the achievement of equity value hurdles in the future of $525 million, $1.025 billion and $1.5 billion.
The company also completed a 1-for-100 reverse stock split, increased its authorized share capital, replaced its board of directors with a new board mainly chosen by the company’s convertible noteholders, and renegotiated its corporate governance documentation. The reverse stock split and increase in share capital became effective on December 5, 2023 and the transactions closed on December 6, 2023.
The multi-jurisdictional Freshfields team was led by corporate partners Valerie Ford Jacob and Michael Levitt, restructuring partners Richard Tett, Mark Liscio and Scott Talmadge, and leveraged finance partner Carol van der Vorst. The corporate team also included counsel Tracy Zhang, senior associate Brandall Nelson and associates Alexander Canahuate, Zo Khalid, Amy Di Pauli, Yunah Ko and Wanyi Zhang. The restructuring and insolvency team also included partners Catherine Balmond and Lindsay Hingston, counsel Samantha Braunstein, senior associates Alex Rich, Adam Jones and Nathan Greenberg, and associates Ali Muffenbier, Eleni Rawson, Anna Bensoussan, and Fredrik Money. The leveraged finance team also included senior associate Julia Horbach and associate Nora McDonnell. People & Reward advice was provided by partners Alice Greenwell and Lori Goodman, senior associate Lucy Carruthers and associates Guy Huffen and Lina Zhu. Dispute resolution advice was provided by partner Doru Gavril. Intellectual Property advice was provided by Giles Pratt. Tax advice was provided by partners Claude Stansbury and Paul Davison and counsel Dennis Caracristi and associate Gabrielle Van Der Haegen.
