F&I Management & Training

The United States Government could take a majority stakeholding in struggling General Motors in an aggressive debt-for-equity swap. The balance sheet restructuring would lower GM's debt by $44 billion to an estimated $23bn, leaving the Government and a healthcare trust managed by the United Auto Workers union with 89% of the equity. The rest would be mainly in the hands of holders of $27bn of unsecured bonds, who are being asked to swap their holdings for shares and accrued interest. Existing shareholders would be left with a miniscule stake. If the debt restructuring is not accepted by bondholders then GM has little alternative but to file for Chapter 11 bankruptcy. The move is another part of GM's latest restructuring plan, which also includes further factory closures, huge job cuts and the closure of its Pontiac brand. The entire restructuring plan will be considered by the US Government's motor industry taskforce. The plan must be with the group by June 1. If approved GM could receive further financial help. Meanwhile, Tony Woodley, the joint general secretary of trade union Unite said that a fire sale by GM of Vauxhall and Opel to Fiat might follow as part of the restructuring. There was no mention of GM's European operations in its latest restructuring plans. Mr Woodley said that British, German and Spanish Governments, countries where GM has significant European plants, should fight such a move because GM Europe needed far more investment than Fiat could muster. Mr Woodley said he feared that GM was in so bad a state that it would sell its European division to 'anyone'. He likened the position to BMW's when it was looking to dispose of Rover.

DATED: 30.04.09

FEED: AW

Remaining staff at struggling van maker LDV have been sent home, after the firm applied to enter administration. About 800 people are employed at its Birmingham factory - though most have not been working, with production halted since December last year. Employees have been paid up to the end of last week, it said, but the firm could not confirm any further payments. LDV said it would continue to look for funding until 6 May when it is due to formally go into administration There are about 1,200 people employed in dealerships, and LDV estimates that "several thousand" staff are employed by its suppliers. The company is still working with a Malaysian investor, Westar, which LDV says wants to keep production in Birmingham. But it is thought unlikely to be able to do a deal before next week's deadline. The leader of the Unite union, Tony Woodley, called on the government to give LDV £4m in emergency aid to stave off the immediate threat of administration and give it time to reach an agreement with Westar. "With so many skilled jobs at risk and with a genuine possibility of a buyer, if this company goes to the wall for the want of a relatively small amount money, then it would be criminal," Mr Woodley said. 'Exceptional conditions' The firm has suffered from the broader decline in demand for commercial vehicles in the UK with registration of new LDV vans down by 73% in March from a year previously, according to the SMMT. However, it has had long-running problems and has made a loss for the last four years. LDV said that it had been relying on the goodwill of suppliers to stay afloat, but that "the actions of a small number of suppliers" had caused the firm's position to reach a point where it had "no alternative" other than to apply for administration. "During the past few weeks, the global economic crisis has forced us to operate in exceptional conditions and we cannot continue in this position without funding indefinitely," chief executive Evgeniy Vereshchagin said in a letter to staff. 'Worrying development' Plans for the future of the business have included a management buy-out, with proposals to begin making electric vans from the end of the year. The firm has held talks with UK government ministers over possible government support for the buy-out, and a bridging loan enable it to secure funding from the European Investment Bank. Asked about the situation in the House of Commons, Prime Minister Gordon Brown said: "We have tried to be of help to them." "We have said that there is a range of government support available if they have a business model for moving forward that we can work with and be able to support." But he reiterated that the responsibility for ensuring the firm was on a sound financial footing lay with its Russian owner Gaz and potential investors. Last month, Erik Eberhardson, the chairman of LDV's Russian owner Gaz, said he believed that LDV could be saved and that a management buyout was the best option.

DATED: 30.04.09

FEED: AW

Chrysler is to enter bankruptcy protection after failing to persuade its main lenders to write off its debts, a White House official has said. President Barack Obama is now due to make a statement later on the future of the struggling US carmaker. The news comes as Chrysler had been in last minute talks to restructure the business before a midnight deadline. President Obama has already said that Chrysler would emerge stronger after any move into bankruptcy protection. 'Hedge fund block' The US government had told Chrysler it would be given a further $6bn (£4bn) of vital state loans if it had successfully restructured the business by midnight. This included trying to persuade the firm's main lenders to accept $2bn in cash, in exchange for writing off all of Chrysler's $6.9bn secured debt. Reports have said that while Chrysler's banks accepted this proposal, it was rejected by hedge funds that also hold a sizeable proportion of its debt. However, some analysts had speculated that Chrysler may prefer to go into bankruptcy protection as a means to give its lenders even less. US Chapter 11 bankruptcy protection gives a US firm time to rearrange its finances under a court-supervised procedure, while continuing to trade, protected from its creditors. Chrysler is owned by private equity firm Cerberus Capital Management, which bought an 80.1% stake from Germany's Daimler for 7.4bn euros ($9.9bn; £6.6bn) in 2007. Fiat talks The US government gave Chrysler three key restructuring demands. In addition to lenders writing off the carmaker's debts, it was asked to secure a cost-cutting deal with its main union, and establish an alliance with Italian car firm Fiat. While Chrysler appears to have failed to reach agreement with its lenders, it has gained an agreement with the union, and talks with Fiat are said to be near a successful conclusion. Fiat is seeking an initial 20% stake in Chrysler, which would then rise to 35% and could even reach 51%. The Italian firm will not have to pay anything for the share, which will give it access to the North American marketplace. In return, Chrysler will be able to take advantage of Fiat's expertise in making smaller, more fuel efficient cars. Sector-wide woes Chrysler, the smallest of the US "Big Three" carmakers after General Motors (GM) and Ford, secured a $4bn loan from the US government at the start of the year, and has since gained $500m more. GM has also received multi-billion government loans. While Ford has yet to require any money, the government has agreed to give it financial support, should it be needed. All three firms have seen sales slump dramatically in their home market as the recession has intensified. GM has its own deadline of 1 June to restructure the business to receive additional state aid, and avoid needing bankruptcy protection. Daimler said earlier this week that it would now be giving up its remaining 19.9% stake in Chrysler. Under the deal, Daimler said it will also write off Chrysler's outstanding loans, and make three annual payments of $200m into the Chrysler's pension plans. Daimler said it marked the final separation of the two firms. The German firm bought Chrysler in 1998 for $38bn.

DATED: 30.04.09

FEED: AW

The UK's first four-seater electric car which can travel up to 70 miles without recharging has been unveiled. The 60mph vehicle, called the Citroen C1 ev'ie, will cost £16,850. The main body of the car, based on the Citroen C1, is being made in the Czech Republic in a joint venture by Toyota, Citroen and Peugeot. The Electric Car Corporation near Bedford aims to assemble 500 of them this year and hopes to make between 2,000 and 4,000 in 2010. The Citroen C1 ev'ie can be fully charged in six to seven hours from a domestic 13 amp socket for about 90p, according to the makers, the Electric Car Corporation (ECC). ECC chief executive David Martell said: "We believe this is the first serious alternative to a petrol or diesel car. "It drives just like a petrol car and has excellent capacity for use in any town or city in the UK." 'Disappointed' The cars are being assembled by a six-person team at Flitwick in Bedfordshire. The government recently unveiled plans in the budget to boost the industry, with subsidies of up to £5,000 on electric or plug-in hybrid vehicles but it is thought that eligible cars will not be on the market until 2011. Mr Martell said: "Obviously we are disappointed that it's not sooner." The electric car market is currently reasonably limited, with models available at anything from £8,000 to more than £80,000 for some of the more high-performance models. Sales have failed to take off in the past because of a number of reasons, like the length of time it takes to charge an electric car, the fact that only two-seaters have been available and that top speeds are considerably lower than their petrol and diesel counterparts.

DATED: 30.04.09

FEED: AW

Car parts maker Magna appears to have moved into pole position for buying a large stake in General Motors' European operations, which includes UK-based Vauxhall. The verdict came after the German economics minister praised a takeover plan by the Canadian-based company. However, the minister also cautioned that the concept lacked some data. Nevertheless, the comments are viewed as important because any investor will need German Government backing to obtain up to €3.3 billion in state guarantees. Vauxhall and sister company Opel have attracted up to seven suitors and GM aims to finalise the sale process in the coming weeks. The minister's words also came amid growing resistance in Germany against a rival takeover approach from Italian carmaker Fiat.

DATED: 30.04.09

FEED: AW

Labels: Delayed Drafts

Lookers’ profits have taken a pummelling falling from £38.3 million to £10.2m according to the group’s preliminary results for the year ended December 31, 2008.
Despite the dip in profits, the dealer group’s revenues were up from £1.68 billion to £1.78bn.
Ken Surgenor, Lookers’ chief executive, said: “We continue to believe that 2009 will be challenging for the new car market.
"However, our diversified business model and market-leading aftersales offering, coupled with the actions we have taken across our franchise operations and the £12m of cost savings in the current financial year mean that we are well placed to weather the uncertain economic environment, take advantage of any opportunities which may arise and emerge from this downturn as a stronger and more efficient business."
Financial highlights
Revenue £1.78 billion (2007: £1.68 billion)
Adjusted profit from operations £33.9 million (2007: £40.0 million)
Profit from operations £10.2 million (2007: £38.3 million)
Adjusted profit before tax £14.0 million (2007: £24.5 million)
Loss before tax £14.9 million (2007: profit £23.0 million)
Adjusted earnings per share 5.34p (2007: 9.81p)
Loss per share 8.82p (2007: earnings 9.09p)
Discussions with existing finance providers to put in new facilities to April 2012 well advanced.

Operational highlights:

Resilient performance against difficult market backdrop
Strong performance from independent aftermarket parts division
Product ranges expanded
National infrastructure strengthened
Strategic review of franchise network completed
Exited 21 satellite and main market operations
Dual franchised a further seven businesses
Successful cost reduction programme generating annualised savings of approximately £12m
Group well positioned to trade through downturn
Strong first quarter performance in 2009.

DATED: 30.04.09

FEED: AM

Chrysler is to enter bankruptcy protection after failing to persuade its main lenders to write off its debts, a White House official has said. President Barack Obama is now due to make a statement later on the future of the struggling US carmaker. The news comes as Chrysler had been in last minute talks to restructure the business before a midnight deadline. President Obama has already said that Chrysler would emerge stronger after any move into bankruptcy protection. 'Hedge fund block' The US government had told Chrysler it would be given a further $6bn (£4bn) of vital state loans if it had successfully restructured the business by midnight. This included trying to persuade the firm's main lenders to accept $2bn in cash, in exchange for writing off all of Chrysler's $6.9bn secured debt. Reports have said that while Chrysler's banks accepted this proposal, it was rejected by hedge funds that also hold a sizeable proportion of its debt. However, some analysts had speculated that Chrysler may prefer to go into bankruptcy protection as a means to give its lenders even less. US Chapter 11 bankruptcy protection gives a US firm time to rearrange its finances under a court-supervised procedure, while continuing to trade, protected from its creditors. Chrysler is owned by private equity firm Cerberus Capital Management, which bought an 80.1% stake from Germany's Daimler for 7.4bn euros ($9.9bn; £6.6bn) in 2007. Fiat talks The US government gave Chrysler three key restructuring demands. In addition to lenders writing off the carmaker's debts, it was asked to secure a cost-cutting deal with its main union, and establish an alliance with Italian car firm Fiat. While Chrysler appears to have failed to reach agreement with its lenders, it has gained an agreement with the union, and talks with Fiat are said to be near a successful conclusion. Fiat is seeking an initial 20% stake in Chrysler, which would then rise to 35% and could even reach 51%. The Italian firm will not have to pay anything for the share, which will give it access to the North American marketplace. In return, Chrysler will be able to take advantage of Fiat's expertise in making smaller, more fuel efficient cars. Sector-wide woes Chrysler, the smallest of the US "Big Three" carmakers after General Motors (GM) and Ford, secured a $4bn loan from the US government at the start of the year, and has since gained $500m more. GM has also received multi-billion government loans. While Ford has yet to require any money, the government has agreed to give it financial support, should it be needed. All three firms have seen sales slump dramatically in their home market as the recession has intensified. GM has its own deadline of 1 June to restructure the business to receive additional state aid, and avoid needing bankruptcy protection. Daimler said earlier this week that it would now be giving up its remaining 19.9% stake in Chrysler. Under the deal, Daimler said it will also write off Chrysler's outstanding loans, and make three annual payments of $200m into the Chrysler's pension plans. Daimler said it marked the final separation of the two firms. The German firm bought Chrysler in 1998 for $38bn.

DATED: 30.004.09

FEED: AW

LDV’s directors have applied for the company to go into administration after the company was unable to secure the investment required for the business.
All staff at LDV were written to this morning by Evgeniy Vereshchagin, LDV’s chief executive officer. He said: “I have to write to you today to notify you that despite all our efforts over the past few months, we have so far been unable to secure the investment required for the business.
“We are still working with potential overseas investors who want to keep production in Birmingham, but they like many people at this time are finding it difficult to secure the necessary funds.”
LDV’s application for administration will be processed on May 6.
Both hourly paid and staff have been paid up to the end of last week and at this point, LDV is unable to confirm any further payments. This means dealers are still waiting to see if they will be paid for warranty work.
Only the senior management team will report for work until further notice and all employees have been requested to leave the Birmingham factory site and await further information at home.

DATED: 30.04.09

FEED: AM

Welcome Car Finance and its 10 used car sites face closure in order to help cut costs for its parent company Cattles.
Cattles said the decision was taken to conserve cash and improve liquidity within its business.
In a statement to the London stock exchange, Cattles said: “Welcome Car Finance has traded successfully during 2009 selling the stocks of cars it had from the end of last year without the acquisition of any new vehicles.
“However, without additional funds to acquire new stock, the business model will become unviable and it is likely that Welcome Car Finance will start to absorb cash.”
Consultation with employees has already begun over a reduction of approximately 130 jobs within the group. The costs of closure are estimated at £5 million.

DATED: 30.04.09

FEED: AM

Target Loan Servicing has won another significant contract to service loans from the Blue Motor Finance portfolio owned by Merrill Lynch. Target Loan Servicing now employs over 120 staff at its modern loan servicing operation in Newport, South Wales. The new motor loan portfolio was transitioned to Target Loan Servicing within just 12 weeks.

Commenting on the announcement, James Snow, Chief Executive Officer for Target Loan Servicing said “Proactive and effective customer management is key for our client. The benefit of Target Loan Servicing is that we offer a highly specialist service with an experienced loan administration and collections team. Coupled with Target Group’s market-leading loan management systems, we can quickly deliver value for our clients. These factors enable us to be very good at realising the value of loan portfolios whilst ensuring we deliver on our Treating Customers Fairly principles” he added.

This announcement follows recent outsourcing contract wins for Target Loan Servicing for the Park Motor Finance portfolio owned by Credit Suisse, the Picture secured loans portfolios and for Ecclesiastical Insurance to service its mortgage portfolio.

DATED: 29.04.09

FEED: MF

RNS Number : 2770R
Cattles PLC


CATTLES PLC

The Board of Cattles announces its proposal to close its direct distribution car retailer, Welcome Car Finance. This decision has been taken to further conserve cash and improve liquidity within the business.
Welcome Car Finance has traded successfully during 2009 selling the stocks of cars it had from the end of last year without the acquisition of any new vehicles. However, without additional funds to acquire new stock, the business model will become unviable and it is likely that Welcome Car Finance will start to absorb cash.
Consultation with employees has begun over a reduction of around 130 jobs within the Group. The costs of closure are estimated at £5 million.
The Board has previously reported that it believed Cattles was in breach of covenants under its borrowing arrangements. Cattles continues in discussions with its banks and the holders of its outstanding Eurobonds and US Private Placement Notes. Management is working closely with its debt providers to sustain their support for the Group's programme of action to stabilise its financial position. The closure of Welcome Car Finance is another step aimed at reducing costs, preserving liquidity and reshaping the Group.

DATED: 29.04.09

FEED: LSE

Ford has declared it will break even in two years and claimed again it does need government help.
The company is the only one out of the top three American automotive manufacturers not to need government support.
In the first three months of this year Ford made a net loss of $1.43 billion compared with a profit of $70 million in the same period last year, reports TimesOnline.
However the results were not as bad as expected.

In the past two years Ford has sold Aston Martin, Land Rover and Jaguar and put Volvo on the market.
It's been reported that at the end of March the company had $21.3 billion left in gross cash.

DATED: 27.04.09

FEED: AM

Chrysler has moved closer to joining forces with Fiat after it settled some problems with its Canadian workers.
The Canadian Auto Workers union have agreed with Chrysler to allow layoffs and pay cuts to save the carmaker approximately $198 million a year. The deal includes the elimination of a third shift at Chrysler’s factory in Ontario, Canada.
The resolution of some of Chrysler’s union worries will make a co-op with Fiat much easier to go through.
Sergio Marchionne, Fiat's chief executive, said: “In light of what I know today, I see no reason why it won't happen.”
It has also been reported that Marchionne is interested in taking on General Motors' European operations, including Vauxhall and Opel. However, these rumours have not been confirmed.
Chrysler has until the end of this week to present its final restructuring plans to the US government.

DATED: 27.04.09

FEED: AM

Fiat could be on the verge of making a bid for Vauxhall/Opel, the European arm of ailing US-based carmaker General Motors. However, Fiat, which is continuing to hold talks with rival struggling US carmaker Chrysler on a potential partnership, has played down speculation that it is interested in buying Vauxhall/Opel or part of it. However, German authorities and a supervisory board member insisted that the Italian group had made contact. A Fiat spokesman said the company remained focused on continuing joint venture talks with Chrysler. It has also been reported that Canadian car parts giant Magna International is interested in acquiring Vauxhall/Opel. It is believed there are up to seven organisations chasing a stake in GM's European businesses. Meanwhile, Business Secretary Lord Mandelson has voiced his confidence over the future of Vauxhall as talks continue over its future. He said: "The Government has a role to play. We are not going to stand by and let chance and fate take over. There is too much at stake for production and employees in Britain."

DATED: 27.04.09

FEED: AW

British Car Auctions, the UK's leading vehicle remarketing specialist, believes the Vehicle Scrappage Scheme proposed in the budget will have an effect in the retail new markets, but the extent is unclear. "The big question is how many existing private owners of ten year old cars or vans will be in the market for a genuinely new car or van," confirmed Tony Gannon, Communications Director, BCA. BCA can see some benefits for small business concerns operating older vehicles, as Gannon explained "There could be some small and medium sized businesses who might want to trade in old working vehicles, such as vans and pick-ups who will welcome this opportunity, but again the volumes are likely to be small." Gannon continued "The scheme might lead to some interesting effects in the used car market, however. There may be an adverse impact on demand for nearly new cars, as those private buyers who do qualify might switch into buying new rather than used." He added "While the scheme is in operation there will be some price distortion on nearly-new cars, which will seem expensive compared to new cars at the discounted price. At the other end of the market, there will be cars aged below ten years that will seem under-valued, because they are worth less than the £2,000 that would apply to cars aged over ten." "Ironically, we could end up with the situation where those families looking to trade-in their six or seven year old car for a new model will be staring enviously at their neighbours 12 year old car because for the duration of the scheme it is worth more!" Gannon concluded "What is almost certain is that for the duration of the scheme there will be some distortion in the natural laws of supply and demand within the used vehicle market."

DATED: 27.04.09

FEED: AW