CPP given £36m funding lifeline

A COMPANY which mis-sold financial products to thousands of customers was yesterday handed a £36m lifeline by its banks, saving more than 700 jobs in the UK.

CPP Group, which sells card protection on behalf of major lenders such as HSBC and Royal Bank of Scotland, said its banks have agreed to a three-year funding package which allows it to avoid collapse. The group was last year fined £10.5m by the Financial Services Authority for “widespread” mis-selling, and is working with lenders and regulators to create a compensation pot for customers.

York-based CPP said its lenders Barclays, RBS and Santander have granted it a £13m credit facility, expiring in July 2016. Some of its banking business partners have also allowed it to defer an estimated £23m of commission due to them for the 12 months to June 2014, with payment delayed to 2017.

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CPP said while it still faces big financial challenges, the funding package is a “significant milestone” and creates a more stable platform, sending its shares soaring more than 50 per cent.

Majority shareholder Hamish Ogston, who founded CPP more than 30 years ago, recently walked away from an attempt to buy CPP for £1.7m.

The company also confirmed chief executive Paul Stobart and finance director Shaun Parker will leave once the refinancing is complete.