CPP at risk of administration

Tue, 26 Mar 2013 | ADMINISTRATION

Credit card insurer CPP is under pressure this week to meet its looming deadline to secure funds of more than £40 million to prevent a move into administration.

Its current £80 million facility with its lenders RBS, Barclays and Santander runs out on Sunday 31 March. The troubled firm was also hit by a £10.5 million fine by the Financial Services Authority last November for mis-selling its policies over a six-year period across the UK.

The total bill likely to be due will be at least £33.4 million; this includes compensation of about £14.5 million to customers.

The York-based business has a 1,400-strong workforce based in 15 countries across the globe, including 900 staff in Britain.

It came to light over the weekend, however, that the firm has failed to come to an agreement with its lenders and is now looking for new sources of backing. Financing options that CPP has pursued include asset sales and a new injection of funds from its founder and controlling shareholder Hamish Ogston, who could possibly take the firm private.

Mr Ogston founded CPP in 1980 with just £1,000, and now has a near 90 per cent holding in the business.

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