Cattles says it won’t pay bond interest, and remains in talks with its creditors
TROUBLED British sub-prime lender Cattles yesterday said it would not make a bond interest payment originally scheduled for 5 July, as talks over its bank debt approach a key deadline.
Cattles, whose shares were suspended in April, added that it was still in “constructive discussions” with its creditors, and that it would issue a further statement “shortly”.
The company, hit by accounting problems which led it to underestimate its bad debts by about £700m, is hoping to negotiate a standstill agreement on a £500m bank loan that expires on Thursday. Cattles, which lends at higher-than-average rates of interest to people who cannot get credit from mainstream banks, also has £400m of bondholder debt maturing in 2017.
The lender, dependent on expensive wholesale funding, earlier this year failed to obtain a banking licence which would have allowed it to finance itself more cheaply through retail savings deposits.
Last week it culled its finance director and five other senior executives after an audit into accounting errors.