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Cattles 'can avoid administration'

Sarah White
Wednesday 22 September 2010 00:00 BST
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The threat of big losses for Royal Bank of Scotland and other banks may help the sub-prime lender Cattles steer clear of administration as restructuring talks drag on, people close to the discussions said yesterday.

The negotiations at the 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.

"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," a source close to the talks told Reuters.

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 loans.

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