Paragon, the beleaguered mortgage lender, is planning to sell a £140m portfolio of car loans as part of its attempts to avert an emergency rights issue. Daily Telegraph, The Sunday Times

The buy-to-let specialist revealed last week that it may need to tap its shareholders for £280m by the end of February to stay in business.

But it is now lining up sales of a number of loan books in an attempt to raise cash. Along with the book of car loans, the potential disposals are thought to include a £60m portfolio of unsecured loans and a £60m book of hire purchase lending agreements. It also has a £450m book of secured loans.

Although the disposals may not provide enough cash to resolve all of Paragon’s problems, it is understood that they could help the company renegotiate terms with its lending banks.

Four top investors have vowed to provide a cash injection to fend off the threat of it having to launch a rights issue in three months.

Standard Life, Blackrock, M&G and Schroders – which between them hold more than 23% of Paragon – have told Paragon’s board that they are prepared to back a funding exercise to raise the full £280m that the mortgage lender requires.