Carvana's Debt Restructuring Doesn't Really Solve Anything
Online used car retailer (NYSE: CVNA) is taking advantage of a soaring stock price to temporarily alleviate some pressure from its mountain of debt. Along with its second-quarter report on Wednesday, the company announced a complex debt restructuring deal it struck with most of its noteholders.
Carvana's press release only tells part of the story. The company plans to eliminate 83% of its debt that matures in 2025 and 2027, which largely eliminates the next two maturities, while reducing its overall debt by $1.2 billion. For the next two years, annual cash interest expense will be reduced by about $430 million. The company is on pace to pay around $600 million in interest this year, so that's a big deal.
That all sounds great, until you look at the company's filing with the Securities and Exchange Commission that lays out the full details.
Source Fool.com
Carvana Co. Stock
Our community is currently low on Carvana Co. with 3 Buy predictions and 7 Sell predictions.
A target price of 33 € results in a potential of -66.57% which would mean heavy losses compared to the current price of 98.7 € for Carvana Co..
