Cattles stays silent over its future

Stricken subprime lender Cattles yesterday refused to comment on claims in a Sunday newspaper that it is preparing for administration.

The move, which would threaten 3,000 jobs and the investments of around 160,000 small shareholders, is considered unlikely as it would need the majority support of creditors.

Cattles owes 2.4bn to creditors, who have been discussing plans to restructure the Batley-based business, which has outstanding loans of around 1bn.

Banks have first call on the assets, despite two failed legal attempts by bondholders, who remain second in line.

Last week, Cattles announced that around one third of bondholders walked away from talks to take the business private.

It is understood they represent around one sixth of creditors.

In the announcement, the company said talks continued with certain creditors to achieve a restructuring of the business, including an offer to acquire the share capital at up to 1p per share.

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

Any restructuring plan, including a decision to put the company into administration, would need the support of 75 per cent of creditors.

In May, Cattles revealed long-delayed results for 2008 which showed losses were nearly 200m higher than first thought at 745m. Shares were suspended at 6.88p in April 2009.