Inchcape has appeared in a list of 53 businesses which have borrowed millions of pounds from the Bank of England’s Corporate Financing Facility.
The AM100 2019’s sixth-placed car retail group by turnover took advantage of a £100 million in tax-payer backed loan to help it weather the impact of the COVID-19 coronavirus pandemic, according to the list published this week.
Among the other car industry firms that borrowed funds under the scheme were Nissan (£600m), Toyota Financial Services (UK) plc (£365m), Mitsubishi Corporation Finance PLC (£300m), Honda Finance Europe PLC (£75m) and Alliance Automotive Investment Limited (£20m).
News of Nissan’s borrowing – the largest of any automotive sector business – came just days after the Japanese car manufacturer suggested the future of its UK car manufacturing operations could be rendered “unsustainable” by Brexit.
Inchcape’s loan agreement was revealed just a fortnight after it reported that its revenues had dropped 32% in the first four months of 2020 as it battled against the impact of COVID-19 on its global car retail and distribution business.
Revenues were down to £2.1 billion as sales declined 41% at Its retail operations and 23% at its distribution businesses.
“Inchcape has taken prompt action to optimise cash flow, reduce costs and strengthen further our liquidity position in light of the current market environment,” it said in its trading statement.
The group said in its statement that it had made use of "the UK’s COVID Corporate Financing Facility".
Other measures taken by the group to mitigate the impact of COVID-19 include suspending its share buyback programme, cancelling its £70m final dividend payment in April and reducing discretionary costs and a 20% cut in Q2 salary for its board and senior managers.
The group has also raised funds through a reduction of its UK retail footprint.