June 19, 2024
News

Cazoo, a UK-based online car retailer, announces entry into administration.

UK-based online car retailer Cazoo has entered administration as its parent company prepares for voluntary liquidation.

The London-based company, listed on the New York Stock Exchange, appointed Teneo Financial Advisory’s David Soden and Matthew Mawhinney as joint administrators.

Cazoo Ltd, Cazoo Holdings Limited, and Cazoo Properties Limited are now in administration while Cazoo Group is set to liquidate.

Founded in 2018 by Alex Chesterman, Cazoo was once valued at over £5bn.

Earlier this month, the company filed notices to appoint administrators for its subsidiaries, providing a grace period to seek a rescue deal.

Cazoo has been reducing its used car inventory, settling stocking loans, and cutting staff to stabilise its finances, including terminating leases, selling customer service centres, and disposing of non-essential assets.

In March, Cazoo announced a strategic shift towards a pure-play automotive marketplace business model.

The administration filing is seen as the next step in restructuring, aimed at optimising returns to creditors.

In a filing, Cazoo stated: “The director placed the companies into administration to allow the joint administrators to continue discussions with new and existing parties interested in the Marketplace business, with a view to concluding a sale over the coming weeks.”

The move puts the jobs of Cazoo’s remaining 200 employees at risk, including those in the marketplace division in London and customer collection centres in Manchester and Northampton.

Their future employment depends on the administrators’ ability to secure a buyer and the willingness of new owners to retain them.

Additionally, 59 employees, primarily from the head office and customer service centres in London and Southampton, will assist Teneo in winding down the business.

Mawhinney added: “Following Cazoo’s decision to pivot to a marketplace model, the group has been winding down its legacy operations and sold a substantial number of its businesses and assets. These sales have generated additional value for creditors, preserved a significant number of jobs, and ensured that leases have been transferred to new operators to mitigate losses to landlords.

“Following our appointment, we continue to progress discussions with a number of interested parties on the marketplace business and remaining customer collections centres. The marketplace model is performing ahead of expectations, with strong dealer sign-up, and the administration appointment provides us with an opportunity to secure a sale of the business over the course of coming weeks.”


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