US Edition Inchcape, led by Andre Lacroix, its chief executive, is examining options which include a rights issue or share placing, although a decision about whether to pursue such an option is not imminent. Inchcape, which is being advised by Deloitte on the talks with its lenders, has committed bank facilities of more than £1bn, well in excess of its debt burden.
People close to Inchcape said this weekend that the review of its capital position and potential fundraising options were prudent in the face of what is expected to be a protracted downturn for the British car industry. Toyota, the Japanese car maker which owns 5pc of Inchcape, is likely to be invited to participate as a cornerstone investor in any fundraising, according to one insider. Inchcape declined to comment this weekend.
Some of Inchcape's rivals, including Lookers and Pendragon, have also been in talks with their banks about financing arrangements. Pendragon secured a covenant waiver late last year to give it more time to renegotiate the terms of its debt.
Figures published last week by the Society of Motor Manufacturers and Traders (SMMT), the industry body, showed that new car registrations notched up eight consecutive months of declines against the same periods in 2007.
Total registrations for 2008 sank to just over 2m and the SMMT believes they will plunge as low as 1.78m, which would be the lowest number since 1992.
The sales plunge has prompted the car industry to ask the Government for help in supporting access to credit. Jaguar Land Rover, the Indian-owned group, has also asked separately for assistance from the taxpayer, although details of a rescue package have still not been finalised.
On Friday, Lord Mandelson, the Business Secretary, signalled again that the Government was prepared to provide help to the motor industry, with ministers believed to be favouring allowing car companies to access the Bank of England's Special Liquidity Scheme. This would see car loans swapped for liquid assets.
Lord Mandelson is due to attend a motor industry summit in Brussels late this week, and an announcement about a package of aid for the British car sector may be timed to coincide with that, according to Whitehall sources.