In a decision to further conserve cash and improve liquidity,
the troubled sub-prime lender Cattles Plc has announced its
proposal to close its car retail and finance arm, Welcome Car
Finance (WCF).
Around 130 staff will lose their jobs as a result of the
decision, Cattles said, with the cost of closing WCF estimated at
£5 million.
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The management team at WCF’s parent, Welcome Financial Services,
were recently suspended and a forensic investigation launched
into the lender’s accounts, over fears that banking covenants have
been breached.
Cattles is currently in continued discussion with the banks
which provide its funding, along with holders of its
outstanding Eurobonds and US Private Placement Notes.
So far this year, WCF has “traded successfully”, Cattles said,
running off its existing stock of vehicles through its 12
showrooms.
“However, without additional funds to acquire new stock, the
business model will become unviable and it is likely that Welcome
Car Finance will start to absorb cash,” Cattles said.
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