LONDON - Provident Financial, the owner of Yes Car Credit has said that it will be closing the business sine it was no longer viable. Talks of finding a possible buyer collapsed last week and Provident said that there was no business sense in continuing to back the company.
This means that a total of 820 jobs are set to be lost. These job losses just add to the unemployment figures that are continuing to rise according to the ONS. However, a spokeswoman for Provident said that they would still be collecting the outstanding £240 million loan amount that is due from Yes.
"If you have bought a car from Yes with a loan then nothing changes, you keep the vehicle and make repayments," she stressed. Provident Financial said that the business was not making the desired progress and hence they had decided to close it down, “Yes Car Credit ceased to be profitable in 2004 and, despite every effort to return the business to profitability, has been suffering trading losses since,” Provident said in a statement. The company added that regulatory changes had also hit the business hard as had increased competition from other lenders.
Employees at the company, which is based at Horsham in West Sussex, have been offered an enhanced redundancy package which is expected to cost about £30 million. The total cost of the closure would be somewhere in the region of £141 million, Provident said. Yes Car Credit has about 60,000 customers and if they have any doubts regarding their loans, they are advised to call a service helpline on 0870 2400 596. Provident said that the profits from its other businesses were expected to be about 5 percent lower than predicted.
“We expect a reduction in profit from this business in line with the market consensus for 2005 and we expect that the recent trends in impairment costs together with increases in other costs, particularly marketing costs, will mean that the annual reduction in profit in 2006 is likely to be greater than in 2005,” the company said.
Posted
on : Wed, 14 Dec 2005 20:50 GMT | Loans News
By : Pippa Fielding
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