Canada Drives has sold the last of its remaining inventory as the company’s used-vehicle segment winds down ahead of schedule.
The online seller sold its final 133 vehicles to Edmonton-based dealership group Go Auto for $2.9 million on April 6, according to the dealership group with more than 50 new- and used-car stores in Canada and the United States as well as a document filed with the Supreme Court of British Columbia.
The transaction was the culmination of roughly three weeks of discounted inventory sales at Canada Drives, which was granted creditor protection on March 20 as it worked to restructure its business.
The Vancouver-based company had about 1,250 used vehicles in stock at the time of its filing under the Companies’ Creditors Arrangement Act (CCAA), according to an affidavit from company CEO Cody Green.
As part of its ecommerce wind-down, Canada Drives aimed to sell off all these vehicles by the end of April.
But sales through the company’s website, directly to dealers, and at auction, have progressed considerably “more rapidly than planned,” according to a report filed by court-appointed monitor PricewaterhouseCoopers Inc. (PWC).
The company’s inventory declined to 810 by March 24, and to 454 by April 2, according to the monitor. By April 4, Canada Drives had only 133 vehicles that remained unspoken for.
On April 4, the company negotiated a bulk sale to Go Auto for these remaining vehicles, and the court signed off on the transaction April 5. Go Auto confirmed to Automotive News Canada April 10 it had completed the purchase.
The sale of the roughly 1,250 vehicles in March and early April will allow Canada Drives to pay back its two secured lenders. At the time of the CCAA filing March 20, the company owed TD Bank and Automotive Finance Canada Inc. for floor plan credit facilities valued at $22.7 million and $6.3 million, respectively, according to PWC.
To achieve the vehicle sales, the online seller discounted each vehicle by an average of $3,500, the monitor added.
The ahead-of-schedule inventory liquidation will also let Canada Drives wind down its ecommerce business earlier than scheduled, PWC said. Under the original timeline, Canada Drives expected to lay off more than 250 staff and exit the online sales business by June 11.
