The decision has been taken to further conserve cash and improve liquidity within the business.
Welcome Car Finance has traded successfully during 2009 selling the stocks of cars it had from the end of last year without the acquisition of any new vehicles. However, without additional funds to acquire new stock, the business model will become unviable and it is likely that Welcome Car Finance will start to absorb cash.
Consultation with employees has begun over a reduction of around 130 jobs within the Group. The costs of closure are estimated at £5m..
The board has previously reported that it believed Cattles was in breach of covenants under its borrowing arrangements.
Cattles continues in discussions with its banks and the holders of its outstanding Eurobonds and US Private Placement Notes. Its management is working closely with its debt providers to sustain their support for the group’s programme of action to stabilise its financial position.
Cattles says the closure of Welcome Car Finance is another step aimed at reducing costs, preserving liquidity and reshaping the group.