Caparo firms drive into debt troubles

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Caparo Group, the engineering group behind the most outlandish of supercars, has admitted that some of its companies have broken the terms of their bank covenants. It blames this on the severe global downturn.

The group, which is non-quoted and chaired by the Labour peer Lord Paul, is an international conglomerate with interests spanning engineering, films, hotels and restaurants. In its latest report and accounts, it says that some of the group's companies have breached the terms of their bank loans.

Caparo reported a turnover of £861m but a pre-tax loss of £3m. Auditor BDO said the company's prospects now depend on securing bank finance: "These conditions indicate the existence of a material uncertainty which may cast significant doubt about the group's ability to continue as a going concern."