Used-car dealer Carvana Co. has hired a financial adviser, and the company’s creditors have banded together to protect themselves while the company’s shares plunged on fears it is headed for a restructuring, WSJ Pro Bankruptcy reported. Carvana’s stock closed down 43% to $3.85 a share Wednesday following reports that the company’s creditors had signed cooperation agreements with each other in anticipation of a potential new capital-raise. The creditor group, including Apollo Global Management Inc., Pacific Investment Management Co. and Ares Management Corp., signed a three-month cooperation agreement as a defensive move to ensure they act in unison if the company attempts to borrow new debt. Carvana also hired Moelis & Co. as a financial adviser, tapping a top investment bank for companies facing financial headwinds. The cooperation agreement covers Carvana bondholders holding around $4 billion in debt, or around 70% of the company’s total debt, and aims to block any coercive transactions that could pit creditors against each other.
