Cattles sells one of its gems
Cattles, the struggling doorstep lender, has today announced plans to sell the Cattles Invoice Finance business for around £70 million to a private equity firm. This is one of the jewels of Cattles crown and one of the few subsidiaries which has remained profitable during its troubles. While £70 million is no small amount, compared to the £2.4 billion which the company owes to its creditors it is nothing but chicken feed. So what next for Cattles?
Since the company's shares were suspended earlier this year, after the discovery of an £850 million black hole, the group has literally been living on borrowed time. The hole in the accounts caused the company to breach banking covenants and ultimately restricted finance for the operation as well as eliminating profitability. Despite the fact that other doorstep lenders have maintained profitability through these troubled times, Cattles seems to have made a real mess of a potentially lucrative economic background.
When you consider that bit by bit Cattles is being sold off to pay down part of the debt which is owned there can be few major operations left which could make a significant dent in the £2 billion plus debt mountain. Whether creditors are waiting for the perfect opportunity to dispose of various subsidiaries or are actually working on a rescue plan is unclear, but it seems very unlikely that Cattles will return to the market, at least not in a form which would be easily recognisable.
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