U.K.-based online car dealer Cazoo has refuted newspaper reports that it could be in administration by the middle of this year.

The Daily Telegraph reported that Cazoo is looking for more funds from investors to keep the business going before it uses up all its cash reserves.

Cazoo responded by detailing its future options. “As we have made clear in our SEC filings, we have commenced an evaluation of potential partnerships, synergies, mergers, acquisitions, joint ventures and sales in the light of our improved capital structure,” the company said.

This is despite admitting in December that it may need new funding by mid-2024 as it submitted form 6-K to the U.S. Securities and Exchange Commission, warning the business has “limited liquidity” and the funds will be needed to “satisfy our liquidity needs going forward.”

Cazoo said it was burning between £30 million and £40 million cash each quarter for business operations and there is a risk it will run out of funds by mid-2024. Some of its lending agreements require it to maintain funds of £50 million ($63 million) or it could face insolvency.

In September, Cazoo agreed a debt-for-equity swap for almost $630 million of debt, forcing investors who were already facing a heavy loss to dilute the value of their shares even further.

In its H1 2023 results, published in August, Cazoo made a loss of £151 million in H1 2023, compared with a loss of £241 million in H1 2022. The improved results were partly due to cost-cutting measures that saw it exit continental European markets, close and sell customer centers and vehicle preparation sites, cancel sports sponsorship deals and make redundancies.

Its full-year results are due to be published within the next month.

 

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