Lookers has doubts over backing from banks

Lookers, one of the Britain's biggest car dealers, admitted today there is "material uncertainty" over whether its banks will continue to back the firm.

The admission came as Lookers announced a £15 million crash into the red in 2008 against a £23 million profit the previous year.

It also scrapped the final dividend, worth 2.42p a share last year.

The continuing uncertainty surrounding Lookers' future has seen the group go right to the wire without breaching the stock market's reporting regulations which state companies have to report their figures within four months of the end of a trading period.

That rule is also being stretched by Pendragon, Britain's largest car dealer trading as Stratstone and Evans Halshaw.

Pendragon is believed to have been in refinancing talks for months and there was still no sign of its 2008 results when the stock market opened for business this morning.

In a statement, Lookers said talks with its banks are advanced but conceded: "Recognising that the new arrangements are likely to be more expensive, the board is therefore also considering alternative sources of capital."

That indicates Lookers could be seeking a rescue rights issue, likely to be deeply discounted from its current share price, up 1¼p today at 46p.