Cattles Share Discussion Threads

[redd] 17/7/2009 10:44

"...the equity is the shares..."

Cattle's position is like someone with a 100% mortgage whose house value has subsequently fallen. It's called negative equity;-)

[badhshah] 17/7/2009 10:07

I think the process of slimming down will avert the possibility of D4E.

[wooly62] 17/7/2009 09:46

John: I had a good break thanks. I had a week in Vegas and I've come back very relaxed.

risk1 - the equity is the shares, so a d4e is not just a possibility and is highly probable in my opinion. The question is what the value of the shares is as that would determine the ratio absorbed by debt. I agree that almost total dilution (which I think is what you probably mean) is a possibility, but without knowing what the real results were and what the current position is we can only speculate about that.

[risk1] 17/7/2009 07:38

and what equity may they be swapping debt for

there is no equity

[spectoacc] 17/7/2009 07:32

ejohn3 - that gave me a good laugh, thanks. At 7p CTT were a £35m co; they've got an £850m black hole in the a/cs which means they prob haven't been making any profits, have defaulted on a bond, & are struggling to refinance their debts. They've stopped all lending in their main division, still haven't been able to reissue their a/cs, and have fired 7 directors. The last trades were at a generous 1p.

For the umpteenth time, & I've said this throughout - the business should/deserves to survive (albeit in slimmed-down form) but the shareholders won't be the ones who own it. Don't expect the co to allude to that until after their AGM votes are in the bag though. In the meantime a suspension avoids a "misleading the market" accusation & saves an awful lot of people from themselves..

The best hope for shareholders is a D4E, as at least that means the shares would likely relist.

[jr50] 17/7/2009 07:27

wooly62

i wondered where you had gone, hope you had a good break,

john

[wooly62] 16/7/2009 21:56

I'm just back from the USA and have witnessed their recession first hand. We're in the same boat, as we all know. The point of that statement is you may have seen the news re CIT in the last couple of days - a $2bn bailout and approval of a banking licence has been followed by a refusal to provide further funding some 6 months later. They're not in quite the same markets, but it does show finance companies won't necessarily be granted ongoing support no matter how big and important they are to the economy. I see no reason for the UK to take a different approach to the US, so this demonstrates the need to restructure the business into a profitable, viable operation. At least it looks like they've won time to achieve that, so we should see a relisting and shareholders will at least have the chance to bail out if they don't "buy into" the longer term strategy.

[catmanboogie] 16/7/2009 18:35

Banks agree to extend Cattles' £500m loan

By Alistair Dawber


Thursday, 16 July 2009

The beleaguered doorstep lender Cattles has extended its £500m credit facility until December, relieving some pressure as it battles to stay afloat.


The company's shares have not traded since April, when it failed to report its 2008 financial results. Eight board members, including the chairman, chief executive and finance director, were sacked without compensation earlier this month after an investigation disclosed irregularities in the way impairment charges were reported.

A consortium of banks, led by Royal Bank of Scotland, are owed £500m by Cattles, owner of the Welcome Finance consumer loans business. They have agreed to extend its loan facility, which was due for re-financing this week, until the end of the year.

The banks, as well as bondholders and other creditors, are still talking to the group's new management about its total debt of £2.4bn. Cattles, based in Batley, West Yorkshire, insists the negotiations are constructive, but some analysts have suggested that the lenders are trying to cut their losses.

The company has written no new business for months. Last year, the Financial Services Authority refused Cattles' application for a banking licence that it said was crucial for its plans. While yesterday's deal with the lenders is not a formal standstill agreement, pushing back the maturity date of the facility will give Cattles some breathing space. It refused to say how much of the facility had been drawn.

[tom111] 16/7/2009 18:28

ejohn3 i think your setting your sights a little high dear boy.

[catmanboogie] 16/7/2009 18:18

Loan rate branded 'immoral'
10:00am Thursday 16th July 2009

By Daily Echo reporter »

A COMPANY which offers loans at a staggering 440 per cent APR to "vulnerable households" has been branded "extortionate immoral and exploitative".

While its practices are legal, Shopacheck has come under fire from civic leaders and consumer bodies after it delivered leaflets to Poole's Canford Heath estate last weekend which promised residents a chance to "start the summer in style" with a deal that "won't leave you out of pocket".

The company offers small cash loans from £100 to £500 at annual percentage rates of 254.5 for a 50-week period or a massive 440.3 per cent for a 30-week period.

A £500 loan at the 50-week option would cost £884 to repay at around £17 a week – £384 in interest.

Criticism has come from a number of quarters and an Early Day Motion has been tabled in Parliament deploring the "unscrupulous money lending" of firms including Shopacheck.

The motion, signed by 68 MPs, called for the government to "outlaw excessive interest rates."

A spokesman for the Consumer Credit Counselling Service said 440 per cent APR reached the point of "exploitation".

He added: "If this company is specifically targeting people who are in very poor financial circumstances on benefits, that is very poor creditor behaviour."

Canford Heath ward Cllr Sandra Moore said she was "horrified" by the loans.

"They are clearly targeting the most vulnerable and the most needy," she added.

Greg Stevens, corporate affairs director for Cattles Plc, which owns Shopacheck, said the APR was so high because of the administration costs of their representatives' weekly home visits to collect repayments. He said changes had been made in the home credit market following the results of a Competition Commission enquiry in 2006, and the introduction of the Consumer Credit Act 2006.

He said: "People are provided with pre-contract information before they sign anything. It is gone through with them so we can give them an explanation of what it is and how much it equates to in terms of total credit, including interest. "It is transparent."

[ejohn3] 16/7/2009 16:40

any guesses when the suspension will be dropped,

will we get an early warning, or will we need to keep an eye on this full time,

and any guesses on value, some will knock me but we must be looking for at least 30p, and 6.88p was a price for a company going bust?

[r0n] 16/7/2009 16:23

As has already been said , this would have gone into admin months ago if the banks wanted it . If Cattles were struggling with they're services generally they would have but obviously the banks think they have a better chance of cutting losses by helping Cattles back to trading again. Sometimes you have to throw money at a project as there's no other way.I also think HMG has an interest in this.

[jr50] 16/7/2009 15:43

redd

im with you on that one redd, careful and 'picky' with any new lending would be a step in the right direction for cattles, we have all now seen thier reckless ways of the past.

shame on all those directors/managers who were responsible.

i surpose you could throw them all in the same barrel as the bankers, the only difference being that cattles directors only cost us shareholders pain , whilst the bankers cost every man woman and child in this country much more .................

john

[redd] 16/7/2009 15:33

JR50, perhaps I should have worded my sentence a little differently, as I did in one other post, to say "they are not offering NEW loans to NEW customers". Hope you're happier now:-)

Btw, it was the renewal loans that Cattles' have said are the main cause of their problems. I do hope they're being a lot more careful now;-)

[wig123] 16/7/2009 14:32

Im sure at 245% interest they can suffer the odd knocker ;-)

[redd] 16/7/2009 14:22

wig, you still have to repay them unless you're thinking of leaving the country for good:-)

[skweeble] 16/7/2009 14:13

Shopacheck are still lending! It is smaller amounts over shorter periods of time, but people can get up to £1500.

[wig123] 16/7/2009 13:49

How much can I get unsecured off em redd?

[redd] 16/7/2009 13:46

"They are clearly allowing Welcome and other trading companies to carry on approved business activities........" Really?

WFS announced they were not making new loans months ago and have not advised of any change to that.

"Please be aware that the wfs.co.uk web site is currently undergoing scheduled maintenance work and as such we are unable to process any personal or secured loan applications at this time."

I suppose you could always try Cattles' Shopacheck business...........

"Shopacheck Financial Services for quick cash loans & cash advance loans
254.5% APR typical"

[jr50] 16/7/2009 12:26

redd

The reason that the bank lenders may be preventing Welcome transfering money to Cattles plc is that under their loan agreements to Cattles plc & its subsiduaries (eg. Welcome where most of the money/assets resides )they are claiming if the covenants on their loans are broken,which they are,they are granted a prior claim on assets contained in subsiduary companies which ranks before any other claims including those of the parent company Cattles plc under the terms of their loan agreements,thus money cannot be moved out of these companies without prior permission of themselves.They are clearly allowing Welcome and other trading companies to carry on approved business activities but I doubt if they would allow interest payments to bondholders which would weaken their security.This subsiduarity claim may be contested by bondholders whose claim is only against the parent company.In addition due to Cattles dire financial position paying bondholders interest might be considered as putting them in a more favourable position than other creditors who have due claims against the company ranking at least equal to the interest payments which in any case would not be allowed.

[squire007] 15/7/2009 22:43

liquidators claim its a dead duck ......... i hope not, got a shed load of these....... i cant see how anyone knows, a long wait awaits!!!!

[djderry] 15/7/2009 20:23

It's been a good day for the company.All of the lenders have agreed to the extension of the £500 million facility.When the accounts are formally signed off we should get a clearer picture of the 'incorrect application' of impairment procedures which led us down this sorry path.There may be legal remedies regarding former directors and/or auditors.The banks most likely have cash flow projections for several months hence.They have also been presented with a number of scenarios by the company,with various projected outcomes depending on the level of risk/lending going forward.There is probably no more closely audited financial company around.Management need to focus on core competencies: the identification of suitable customers and the controlled risk management that was a hallmark of the company for many years before a coterie of directors (and others) allegedly lost the run of themselves.Shareholders need to support the new management and make it clear that,in due course,we will support the restructuring which may be required.

[tom111] 15/7/2009 19:46

The truth is nobody knows,your guessing REDD

[redd] 15/7/2009 19:37

jr50, ctt defaulted on an interest payment to the bondholders so not really a case of favouring one lender over another but a clear indication of their dire financial circumstances. But then you knew that;-)

Shareholders should be surprised and concerned by that given that ctt has not been giving customers new loans and still have no spare cash. Suggests they're still struggling with defaults.