1Car1 owed lenders £120m
CAR and van rental company 1car1 owed its main funders nearly £120m when it collapsed in March.
A group of 16 banks and lenders, including Bank of Scotland, Barclays and Yorkshire Bank, had committed the cash under vehicle hire purchase agreements with the Leeds-based business which had operations throughout the North.
The loans included £25.4m from the Bank of Scotland, £17m from Barclays, £17m from Lombard Corporate Finance and £13m from Yorkshire Bank.
Administrators at PricewaterhouseCoopers (PwC) said they expected to recoup £100m from vehicle sales. Some 12,000 vehicles have now been recovered with 1,800 still with 1Car1’s customers.
In a creditors’ report PwC said the withdrawal of funding support from some lenders, as the credit crunch began to bite last year, dealt a fatal blow to 1car1. By January it had lost funding facilities worth £15m.
Over the past five years 1car1 became the UK’s largest independent hire company as its fleet grew from 4,000 vehicles to more than 15,000. It also opened more branches, growing from 23 to 86 across the UK. It had an office in Spain and affiliated operations in Australia and New York.
The business funded much of its cash flow with manufacturers’ rebates that were worth around 40% of a vehicle’s list price. Its problems began when one of its hire purchase funders withdrew support and demanded the rebate as a deposit against vehicle costs.
A number of other funders then followed suit leaving the directors struggling to arrange alternative funding. These talks failed and administrators were called in.
Administrators sold 1car1’s intellectual property to Enterprise Rent-A-Car for £300,000. Customer contact details were sold to Avis for an undisclosed fee based on future earnings from the information.
Unsecured creditors are expected to get a return but PwC said it could not yet put a value on the dividend.
1car1 was the trading name of Local Contract Hire & Leasing (LCH) which went into administration on March 18 along with 1car1 Contracts and 1car1.com. The companies’ directors were George and Simon Large.
LCH made a post-tax profit of £2.6m on turnover of £65.7m in the year to March 31, 2008. The administrators said they had made 470 staff redundant and cut the number of branches from 86 to 13.
