(Bloomberg) -- Automotive financing provider Vroom, Inc., which entered a restructuring support agreement with creditors and its largest stockholder, has filed for bankruptcy.
Vroom filed for Chapter 11 in the Southern District of Texas court. It listed assets of $43.8 million against total debt of $304.6 million in its petition.
Under the firm’s plan, Vroom’s $290 million of unsecured convertible senior notes due in 2026 will be restructured into equity. Distressed credit-focused hedge fund Mudrick Capital Management backs the plan and was “instrumental in the negotiations” leading to the restructuring, the company said in a statement on Tuesday.
Vroom owns United Auto Credit, a lender that offers vehicle financing to consumers through third-party dealers, according to its investor presentation. It also owns car data and technology provider CarStory. It posted a $37.7 million net loss in the third quarter from continuing operations and had $51.1 million cash and cash equivalents as of Sept. 30.
The aim is for the firm to move forward without long-term debt, Tom Shortt, the company’s chief executive officer, said on Tuesday.
--With assistance from Libby Cherry.
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