Carvana Plans Turnaround with Strategic Restructuring, Stock Rebound and Debt Overhaul: Report – Carvana (NYSE:CVNA)

Carvana Co. CVNA it is reportedly preparing for a renovation.

Over the past 18 months, Carvana has undertaken significant restructuring, focusing on operations and debt reduction amid concerns about bankruptcy, CNBC reported.

These strategic moves are crucial for the company and its major shareholders, especially the CEO Ernie Garcia III and his father, Ernie Garcia IIwho collectively control 88% of Carvana through special voting shares.

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The ongoing efforts have proven to be effective, leading to a notable improvement in the performance of Carvana stock.

While the stock has rebounded from under $5 a share to over $55 in early 2024, it remains significantly below its peak of over $370 a share reached during the 2021 COVID-19 pandemic, CNBC noted .

“We have every intention of continuing to make progress and do not expect to return to a situation like this,” the company’s CEO told CNBC in an interview. “I think the pressure of the last couple of years has made us really focus on the most important things.”

At the conclusion of the third quarter, Carvana boasted $544 million in cash and cash equivalents, up $228 million from the end of the previous year. The company’s total liquidity, including secured debt capacity and other items, was $3.18 billion.

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Carvana’s new notes will mature in 2028, while existing notes, with interest rates ranging from just under 5% to more than 10%, have maturity dates ranging from 2025 to 2030, CNBC added.

Collectively, the old and new notes make up about 78% of Carvana’s nearly $6 billion total debt.

The company will release fourth-quarter and fiscal 2023 financial results after the market closes on Thursday, Feb. 22.

Price Action: CVNA shares closed 2.16% higher at $43.45 on Friday. After the close, shares fell 0.23% to $43.35.

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This content was partially produced with the help of artificial intelligence tools and was reviewed and published by Benzinga editedrs.

Photo: Shutterstock

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