Cazoo reportedly lining up administrators

21st May 2024 11:52

(Sharecast News) - Cazoo, the online car retailer once valued at over £5bn, looked set to enter administration on Tuesday, according to Sky News.

The report, citing industry sources, said Teneo had been lined up as the administrator, a week after Cazoo filed for temporary protection from creditors.

It came amid significant layoffs, with more than 700 employees having lost their jobs already.

Sky said Teneo planned to retain some staff to manage Cazoo's marketplace model while exploring potential sales, with the marketplace reportedly already attracting interest from several parties including BMW, Motorpoint, Car Gurus, and Motors.co.uk.

Cazoo's wholesale arm was sold to G3 on Monday, while Constellation Automotive, which owns competitor Cinch, acquired several of its assets.

The company was founded in 2018 by Alex Chesterman, the entrepreneur behind Zoopla, and raised significant funding before achieving a valuation of $8bn when it listed on the New York Stock Exchange in 2021.

Cazoo invested heavily in sponsorships across football, snooker, and darts to rapidly expand its market share.

The company faced mounting financial challenges, however, with recent asset sales, including its vehicle fleet, happening at higher-than-expected values due to a shortage of used cars in the market.#

Alex Chesterman departed the company months ago following a significant restructuring that converted substantial debt into equity.

Cazoo had not commented on the administration reports on Tuesday, but previously said that its new marketplace model was performing well, with interest from nearly 100 car dealers.

The company claimed it had "successfully restructured and significantly reduced the cash burn of the group," according to Sky.

Reporting by Josh White for Sharecast.com.