(Reuters) -British online car retailer Cazoo Group said on Monday it had limited liquidity and will need to raise additional capital before the beginning of the second half of 2024 to pursue its business objectives.
The company would have to “substantially alter, or possibly even discontinue, operations” if it does not obtain sufficient cash, it said in a regulatory filing.
Cazoo had cash and cash equivalents of 194.6 million pounds ($246.11 million) as of June 30, and expects to end the year with cash between 100 million pounds and 115 million pounds.
It aims to cut back cash utilization to between 25 million pounds and 35 million pounds per quarter starting 2024, compared with the 30 million pounds to 40 million pounds in cash it currently utilizes each quarter.
The warning comes less than two weeks after Cazoo said it completed its debt restructuring and other related transactions that helped reduce debt from $630 million to $200 million, prior to which it also announced a reverse stock split to help raise capital.
Cazoo in August raised substantial doubt about its ability to continue as a going concern, struggling with persistent inventory problems amid a tough economic backdrop across its UK and global markets.
“We expect to continue to be impacted by the challenging UK and global macroeconomic environment, which could adversely impact our ability to sustain revenue growth consistent with the past, or at all, over the next twelve months,” it said on Monday.
($1 = 0.7907 pounds)
(Reporting by Deborah Sophia in Bengaluru; Editing by Shounak Dasgupta)