Accident Exchange, the accident management and dealer services group, warned investors on Friday it is uncertain whether it can meet existing banking covenants and it expects to post a first half loss.
In a trading update for the six months to the end of October, the group said it was undergoing a review with its main banker and asset backed lenders ahead of the expiry of its three year working capital facility on September 30 next year.
It also warned it expects to post a loss when it publishes its first half results in late December, as a result of having to settle more cases with insurers.
Nevertheless, overall rental days were up 2.6% and overall fleet utilisation had improved. Higher margin prestige rental days were down, and being offset by an improvement in lower margin mainstream brand rentals.
It now aims to cut costs and refocus on the prestige referrals and manufacturer relationships, and cut its mainstream fleet, to produce annualised savings of £24m.
The company also reported it has identified more than 6,500 previous credit hire cases where it alleges contestable evidence was used, and it aims to apply to court to re-open cases where appropriate.