Investors ‘would lose out’ in Cattles sell-off

Troubled subprime lender Cattles today warned it could be sold in a restructuring deal which would leave shareholders with just a fraction of their investment but could allow the company to be delisted from the stock market.

Cattles, which has been in talks with its own banks for months in a bid to restructure its liabilities, said one proposal is for a "newly incorporated company, formed and managed by a corporate service provider and ultimately owned by a charitable trust" to acquire its entire share capital.

It added that shareholders could not expect to receive more than 1p per share.

The shares, which were trading at 300p a year ago, were suspended at 6.88p in April as Cattles reported a £745 million loss.

Sources close to the company said creditors were reluctant to put Cattles into administration because it would make it harder to collect money due on thousands of personal and second-hand car loans.

But delisting Cattles from the stock market and selling it to a new company would allow shareholders to crystallise losses for tax purposes. Any move requires the agreement of 75% of shareholders.