Used car dealer Cazoo ready to enter administration

Cazoo was founded by former Zoopla executive Alex Chesterman. Photo: Tom Stockill Photography

Without a deal, however, Cazoo warned that its existing businesses would be «required to file for administration or liquidation» and potentially wind up the company.

Cazoo founder Alex Chesterman has become one of the most wealthy people in the UK when the company went public, just three years after it was founded. Other sponsors who received large salaries included the publisher of the Daily Mail.

In an effort to raise its profile, the company spent tens of millions of pounds a year on sports sponsorship deals and advertising.

He has struck deals with at least nine football clubs, including Premier League stalwarts Everton and Aston. Villa, as well as Spanish clubs Valencia and Real Sociedad, French giants Olympique Marseille and German Freiburg.

Cazoo also became the main sponsor of the St Leger Stakes, a cricket tournament » The Hundred, Rugby World Cup, World Snooker Tour and PDC World Darts Championship.

The business at one point employed more than 5,000 people across the UK and Europe, but has since cut thousands jobs to survive.

Cazoo has just 1,500 employees in March 2023, the vast majority of them in the UK, according to its latest annual report filed in the US.

The potential administration comes amid falling used car prices and concerns that demand for electric vehicles has stalled.

< p>Cazoo initially owned its entire fleet of used cars, which it offered to deliver to customers' doors from centers across the UK.

The business began a period of rapid domestic and international expansion, buying up competitors and expanding around the world. Europe.

However, in March the company announced that it would change its business model, sell off its vehicle inventory and transform into a purely online marketplace similar to Autotrader.

At the time, Cazoo said which will make “changes to our operations consistent with a pure market model, such as closing fulfillment operations and reducing headcount.”

On Wednesday, Cazoo reported this to the stock market. that three of its UK subsidiaries have filed notices of intention to appoint administrators. These documents provide for a moratorium on creditors filing claims against the company for a period of 10 days, which can be used as a last-ditch attempt to save the business.

The Telegraph reported in February that Cazoo had called in a team of restructuring experts to try to overcome its funding crisis, and that the company was considering a sale or demerger.

Failure would mean Cazoo would join to a growing list of UK companies that have gone public in the US through a so-called special purpose acquisition company (Spac) at eye-watering prices before falling into administration.

Electric van maker Arrival and healthcare company Babylon went public in the US using space deals and have since filed for bankruptcy.

Cazoo is being advised by law firm Magic Circle Freshfields, shown legal documentation.