July 19 Reuters Carvana shares soared as much as 43 on Wednesday after the troubled usedcar retailer struck a deal with most of its term bondholders to cut its outstanding debt by more than 1 billion.

The agreement, with a group including privateequity firm Apollo, eases some of Carvana39;s liquidity issues as it struggles to cope with a slump in demand for used cars.

Apollo is pleased to support this debt exchange agreement, which stands to significantly strengthen Carvana39;s financial position while providing creditors with new first lien debt, Apollo39;s deputy CIO of credit, John Zito, said in a statement.

Carvana had longterm debt of 6.54 billion as of June end, relatively unchanged from a year earlier.

The company, which allows customers to buy cars online, became popular during the COVID19 pandemic, as people opted for readily available used cars instead of buying newer vehicles, which were in short supply due to a global chip crunch.

But Carvana has been struggling to sell cars acquired at elevated prices as buyers, hit by inflation and worried about a recession, cut spending.

Carvana shares have lost 87 of their value in the past two years. The company39;s market capitalization is 7.5 billion, well below the 60 billion it commanded in 2021.

In order to strengthen its balance sheet and attain positive cash flow, the company has been trimming inventory, slashing advertising expenses and selling auto loans.

We continue to have additional loans that we…