Cattles' bondholders offered £39m olive branch to get back into talks

Talks to take Cattles private collapsed last month after a number of bondholders walked away from the table.

Cattles' creditors have two options – to resurrect the talks or let the company go bust.

It is yet to be seen whether the bondholders accept the 39m olive branch.

Cattles warned yesterday that its creditors should brace themselves for heavy losses.

The Batley-based group said its creditors are likely to suffer an aggregate loss of around 1bn.

It is understood that a third of the bondholders decided to ditch the talks last month.

There are three distinct groups battling it out to recoup their losses from the Cattles debacle.

In pole position are the banks, who have been awarded first call on assets.

In second place are Cattles' other creditors, the bondholders.

In third place are the shareholders who stand to gain nothing as the creditors are owed 2.4bn and the group has loans outstanding of just over 1bn.

Cattles is winding down the loan book in an attempt to get as much cash as it can to repay creditors.

Under the terms of the talks, shareholders could have been offered just over 5m, no more than 1p a share.

The discussions revolve around the banks offering the bondholders a certain percentage of the money recovered from the loan book despite various court hearings ruling in favour of the banks.

Both stand to gain less if the talks are not resurrected.

The plan to take the company private would allow the group to wind down the loan book out of the public eye.

Cattles was brought to its knees by a long-running accountancy scandal.

Its shares were suspended in April last year at 6.88p after accounting problems left it saddled with 700m of bad debts.

That also resulted in the dismissal of senior executives and an FSA investigation.

In May, Cattles revealed long-delayed results for 2008 which showed losses were nearly 200m higher than first thought at 745m. Impairment losses for 2008 totalled 794m. The group also warned that it will report "significant" losses for 2009.