Cattles still looking at all the options
PARTS of Yorkshire-based lender Cattles’ business are still performing albeit at a much reduced pace, the troubled firm has reported.
The Leeds-based company said that discussions with its bankers, bondholders and holders of its US Private Placement Notes were ongoing as the lender tries to stabilise its financial position.
The Lewis Group, which is one of the leading players in the UK purchased debt market, saw collections rise 5.6% to £23m for the three months ended March 31.
Receivables since December 31, 2008 have increased 2.5% to £179.8m. Like-for-like debt purchases fell unsurprisingly from £16m to £13.5m.
Equally, Cattles Invoice Finance is holding steady with client numbers remaining stable at 722.
Net receivables however have dropped 10.6% since December to £77.4m.
The bank, which last month announced its decision to close its distribution car retailer Welcome Car Finance in an attempt to save cash and increase liquidity in the business, said it was still exploring options in relation to the business including a potential disposal.
Disposal and closure are key options in its strategy to regain control of a business, which asked for its shares to be suspended in April.
The closure of Birstal-based Welcome Car Finance is estimated to be £5m. Around 130 people have lost their jobs as a result of the decision.
Earlier in the month Cattles said it would have to declare a further £700m in impairment provisions.
The sum will be additional to £400m already identified and confirms the Leeds firm’s earlier fears of a “significant” pre-tax profit loss for the year ended December 31.
It has previously said an investigation by law firm Freshfields Bruckhaus Deringer and business advisers Deloitte had confirmed “there has been a breakdown of internal controls which has resulted in the group’s impairment policies being applied incorrectly”.
As a consequence, not only will last year’s accounts need to be restated, but Cattles has warned that previous year’s financial statements may also need to be adjusted as a result.
Cattles asked for its shares to be suspended because of fears it would not be in a position to publish its annual figures for the year ended December 31, 2008 by April 30, as the talks to refinance its debt continue.
