(Bloomberg) -- Carvana Co. reached a deal with bondholders to reduce debt and extend some maturities as the used-car retailer tries to regain its footing following a disastrous push for growth during the pandemic.
The agreement announced Wednesday will eliminate about 83% of its 2025 and 2027 unsecured note maturities and lower required cash interest expense by $430 million a year for the next two years. Carvana expects to reduce its total debt outstanding by more than $1.2 billion, according to a statement.
Carvana shares soared as much as 30% as of 6:45 a.m. Wednesday, before the start of regular trading in New York.
The restructuring is a breakthrough in Carvana’s efforts to get a handle on its debilitating debt load following an ill-fated effort to expand in recent years. The company raised billions of dollars to capitalize on surging demand for used cars, but the market has slowed recently amid higher interest rates and rebounding auto production.
Read More: Carvana Asks Bondholders to Take Big Hit to Cut $8 Billion Debt
Carvana had tumbled late Tuesday after the company surprised investors with a last-minute change to the earnings release plan, moving up the date by several weeks.
In a separate statement, Carvana reported second-quarter revenue and earnings that beat estimates.
--With assistance from Amelia Pollard.
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