Cazoo Group Ltd (NYSE:CZOO), the UK-based used car retailer that floated in New York in 2021 at almost an $8 billion valuation, is taking steps toward entering administration as it works to save the embattled business.
A filing with the US Securities and Exchange Commission (SEC) revealed that the company failed to secure emergency funding and three of its UK subsidiaries have filed notices of intent to appoint administrators.
These notices provide a moratorium on creditors launching claims against the company for 10 days and gives the group time to stage a final attempt to save the business.
The company said that its subsidiaries will continue to operate as normal for now.
However, it warned that should certain subsidiaries enter liquidation, it will need to consider the “best options for the company” which may include filing for administration or winding up the company.
Founded in 2018 and backed by the Daily Mail and General Trust (LSE:DMGT), the company rose to a peak valuation of about $8 billion in 2021 as it benefitted from used car purchases moving online during the pandemic, though its shares began falling sharply towards the end of that year.
The Daily Mail owner DMGT had a stake of 16% in Cazoo at the time of the NYSE listing and in the following year settled a controversial dividend by paying its shareholders equity in the digital car dealership.
This March, the company sold off its remaining stock and switched to a new online marketplace model, allowing used car dealers to list vehicles for sale on its platform, and wound down its European business.
Its current valuation is under $35 million, with Cazoo’s US-listed shares trading down 8.2% at $7 late morning on Thursday.