Loss-making sub-prime lender Cattles has unveiled a last-ditch rescue plan as part of a bid to stave off administration.
The Batley-based loan specialist has put on the table a deal that would see bondholders paid just £49 million of the £750 million they are owed, while shareholders would receive 1p per share.
If the offer is rejected when shareholders and creditors are given the opportunity to vote in the new year, the management will put the company into administration.
The proposal was announced on the same day the company released results showing it made a pre-tax loss of £685.4 million in 2009, compared with a £764.6 million loss the previous year.
Bosses are hopeful that the rescue package will be approved because it already has the backing of some of its biggest creditors.
It would be run by a ‘shell’ company, called Bovess, under the same management team, and it would continue to collect its loans, some of which have a lifespan of two years.
It would also allow the company to preserve jobs, at least in the short-term, as it could gradually reduce its 2,800 staff, whereas administrators might make drastic redundancies.
The terms of the offer have been thrashed out following weeks of discussions with bondholders and banks.
There are no plans to carry on lending through its main trading arm, Welcome Finance.
But its doorstep lending and debt collection businesses have now returned to profit and could continue trading for the foreseeable future.