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May 22, 2009updated 12 Apr 2017 11:59am

Welcome Car Finance to close

In a decision to further conserve cash and improve liquidity, the troubled subprime lender Cattles Plc has announced its proposal to close its car retail and finance arm, Welcome Car Finance (WCF).

By Valerie Noury

In a decision to further conserve cash and improve liquidity, the troubled subprime 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.

The management team at WCF’s parent, Welcome Financial Services, was recently suspended and a forensic investigation launched into the lender’s accounts, over fears that banking covenants have been breached (see April’s Motor Finance).

Cattles is currently in continued discussion with the numerous banks which provide most of 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 added.

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