9:07 am, May 23, 2024
Cazoo Group is to be delisted on the New York Stock Exchange following its momentous fall from grace.
Administrators were appointed to the failed online used car dealer-turned-marketplace on Tuesday after it failed to find fresh investment following a loss of £704m in 2022, which was on top of its £544m deficit in 2021.
It also tried restructuring its $630m (circa £495m) debt last December but all to no avail.
The transition to the marketplace model saw 728 redundancies being made after a consultation process between March 1 and May 17.
At its height, Cazoo had 4,500 employees but now there are just 208, who have been retained for the time being as joint administrators Matthew Mawhinney and David Soden from Teneo attempt to find a buyer.
When Cazoo began trading on the New York Stock Exchange (NYSE) in August 2021, it was worth $7bn (£5bn) but that valuation is now just $30m (£23.6m).
According to the Securities and Exchange Commission (SEC), Cazoo – which failed to file its 2023 accounts in time – was notified by the NYSE on Tuesday (May 21) that it would begin proceedings to delist its Class A ordinary shares, valued at $0.20 (16p) per share, and that trading in its ordinary shares would be suspended with immediate effect.
Cazoo founder Alex Chesterman is staying tight-lipped about the company’s demise. Image: Cazoo/PA
The SEC is an independent agency of the US federal government that protects investors as well as enforcing the law against market manipulation.
The NYSE will apply to the SEC to delist the ordinary shares and Cazoo has said it doesn’t intend appealing against the move.
Once it’s delisted, Cazoo expects that its ordinary shares will then start trading in the OTC Pink Marketplace – a much more limited market than the NYSE and which ‘could further depress the trading price of the ordinary shares’, said the SEC – although it’s not guaranteed that they’ll start trading or continue to trade on it.
An extraordinary general meeting of shareholders is to be held on June 6 to seek approval to wind up Cazoo. If they approve it, liquidators will be appointed,
Alex Chesterman, who founded Cazoo in 2018 and launched it the following year, stood down as CEO in January 2023, leaving it completely in December.
When the BBC asked him for a comment on Cazoo’s plunge into administration, he said he hadn’t had any involvement with it for more than 18 months and wouldn’t give any further comment.
Main image: Alamy/PA
