British online used car retailer Cazoo Group (CZOO.N) announced in a regulatory filing on Tuesday that it will appoint administrators from the advisory firm Teneo to assess the viability of its business.
Teneo’s administrators will continue to seek buyers for the company’s remaining assets, according to Cazoo.
The company is also engaged in ongoing discussions with multiple parties interested in its marketplace business.
Cazoo indicated that it will need to raise additional capital in the future to continue its operations.
The company, founded in 2018 by entrepreneur Alex Chesterman, was once celebrated as a successful online retailer during the lockdown.
However, the valuation of the London-based company, which reached $7 billion when it was listed on the New York Stock Exchange in 2021, has plummeted to around $30 million.
The potential collapse into administration would allow Teneo to focus on selling Cazoo’s assets. Several potential buyers have already expressed interest, including industry peer Motors.co.uk.
Last year, Cazoo raised substantial concerns about its ability to continue as a going concern, citing persistent inventory problems and a challenging economic environment in both the UK and global markets.