A SALE process has begun for York credit card insurer CPP as the business "explores all options" to stabilise its balance sheet for a return to growth.

In a trading update the Holgate based firm said it is looking to secure new agreements with creditors, funded by new equity capital.

The company, which is looking to rebuild its finances having been fined £10.5 million by the Financial Conduct Authority in 2012 for mis-selling insurance, and subsequently ordered to pay out £65.8 million in compensation, say it has received indications of interest to subscribe for £9 million of new equity.

The firm said any new equity raised would be "at a significant discount" to Friday's closing share price of 6.2p, which fell from an opening of 10.75p, with expressions of interest indicating that shares would be valued at 3p each.

However CPP said "there can be no certainty" that an agreement will be reached with creditors, or than any equity raise will be completed, and as such the board continues to pursue all options, which includes a potential sale of the business.

Group chief executive Brent Escott told The Press: "Nothing is certain until it is signed. We have an obligation to explore all options.

"While we are listed that puts restrictions on funds and sources of capital. By broadening the scope of that we can talk to private equity and other trade entities. It widens the scope of people we can talk to.

"The board's priority is to push ahead with the restructure and raising of money as a listed entity. That's where we have made very good progress but it's always nice to have options and the more options we have the better it is for the business."

The group's update also stated that is new equity is raised, the board intends to transfer from the London Stock Exchange to its smaller counterpart AIM.

Mr Escott said: "A key milestone was completing the compensation scheme. That cost us more than we expected, infact it was nearly double what we thought it would be.

"Completing that closed a chapter in our journey. Now in the next phase we are working to get the business positioned for growth.

"Part of that is restructuring the balance sheet. We have been talking to our creditors and potential investors. It's very positive progress.

"I think for staff there was a huge amount of uncertainty surrounding the scheme, which was such an unknown. This process is something we have instigated and something under our control."