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Cattles May Avoid Administration, Banks Key - Sources

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The threat of big losses for Royal Bank of Scotland (RBS.L) and other banks may help subprime lender Cattles (CTT.L) steer clear of administration as restructuring talks drag on, people close to the discussions said.

Restructuring negotiations at the Hull-based firm, crippled by bad loans and accountancy problems, were derailed last week when a group of bondholders walked away, raising doubts over the chances of reaching a deal on its 2.7 billion pound debt pile.

A bitter creditor dispute between bank lenders and bond investors would likely escalate in an insolvency, endangering banks' chances of recovering as much of their investment in Cattles as possible, the sources said.

"The banks are in the driving seat, even though bondholders are trying to pile on the pressure," said one source familiar with the situation. "You could put a company like this into administration without damaging the value of the assets you are trying to recover, but it would be hugely complex to sort out."

Unlike with Connaught (CNT.L), a property maintenance firm that collapsed two weeks ago after lenders refused a fresh loan, banks may decide it is better to keep Cattles afloat.

Its ability to collect debts from clients, and thus repay more to creditors, could be damaged by insolvency, as it could make borrowers less inclined to pay back their loans, the first source said.

Looks like the taxpayer will be bailing out this subprime lender.

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In the UK as far as business is concerend the shittier the business model, the more it gets bailed out.

Only if the business has shareholders/Vi's who know people who know people that are able to shaft the taxpayer.

Edited by Flatdog
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  • 415 Brexit, House prices and Summer 2020

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