Payment default puts Cattles closer to brink

Cattles, the stricken subprime and doorstep lender, lurched further into crisis today as it admitted that it will default on an interest payment for a £400 million bond. The payment was due yesterday.

It is the latest in a long line of problems at Cattles and comes as an important deadline in its discussions with its lenders approaches.

The company, whose customers are people unable to obtain credit from mainstream banks, said that it is still locked in talks with creditors over a standstill agreement on a £500 million loan which expires on Thursday. If an agreement is not reached, it is in danger of collapsing into administration.

Cattles cleared out its boardroom last week and fired seven directors following an investigation into accounting errors which left a
£700 million black hole in its balance sheet.

Trading in its shares was suspended in April and its 2008 results have been delayed.

Earlier in the year, Cattles gave up on a bid to obtain a banking licence which would have allowed it to accept retail deposits.