Discovery names liquidators

[Frogmogman]

With interest rates so low, what part does bank lending (or not) have in all this? Are banks wary of yacht builders?

My father was a farmer who would buy, improve and sell small farms. Every one he bought, he said, was sold because the bank lent money (often not needed) and then wanted it back quickly, so bankers are not always your friend.

That’s pretty much what happened with Contessa Yachts in the mid 80s. The bank authorised an overdraft to build some boats on spec (with an excellent brand new model, the 27) and a recent model (the 33) and the Southampton boat show coming up, to hopefully generate some orders, it seemed a better thing to do than laying off workers.

Then the bank brought in a new manager at the Lymington branch who didn’t like it, and called in the loan, making the company insolvent.

 

[Tranona]

With interest rates so low, what part does bank lending (or not) have in all this? Are banks wary of yacht builders?

My father was a farmer who would buy, improve and sell small farms. Every one he bought, he said, was sold because the bank lent money (often not needed) and then wanted it back quickly, so bankers are not always your friend.

The problem with banks is they tend to want their money back or have a charge of assets of greater value than the amount lent. So a business like Discovery which has no assets, only designs and potential orders is not a good prospect for bank support. This sort of business requires shareholder funding and as is obvious the current shareholder is no longer prepared to risk further money.