Castle Donington jobs go as Welcome car Finance closes

Jobs are under threat after troubled lender Cattles decided to close its Welcome Car Finance operation, which has an office at Castle Donington.

Around 130 jobs could be lost at offices across the country, with 11 staff at Castle Donington now on a 30-day consultation about their posts.

Cattles said it wanted to close the Welcome Car Finance business to conserve cash.

The operation lends money to borrowers with a poor credit history to buy cars from its network of 10 branches across the country.

Cattles has been selling stocks of cars left over from last year, but said that without funds to buy new stock the business model was "unviable". The closure will cost it £5m.

Besides Castle Donington, Welcome Car Finance has branches in Bristol, Edinburgh, Luton, Knowsley, Thurrock, Castleford, Feltham near Heathrow, Fareham and South Tyneside.

In the first half of last year it made profits of £3.7m, with sales up 11% to 7,455. But the business has been hit by the slump in the car market as well as the woes affecting its parent company this year.

Cattles' main Welcome Finance business, which employs hundreds of people in Nottingham, is still up and running but has suspended lending to new customers in order to conserve funds.

Shares in Cattles were suspended last week after the troubled firm said it would not be able to publish accounts by the end of the month.

The firm said earlier this month that an independent review of its impairment provisions had made significant progress but was likely to result in write-downs of up to £850 million.

A "breakdown in internal controls" led to accounting policies on bad loans being applied incorrectly – leaving Cattles in breach of banking agreements, triggering the need for refinancing talks.

Six of its senior executives remain suspended, including finance director James Corr, chief operating officer Ian Cummine and Welcome's compliance and risk director Adrian Cummings.

Cattles has suffered a series of blows in recent months, having also had to concede defeat in its long-running attempt to secure a licence for banking deposits.