MORE than 500 York jobs were saved as troubled York credit card protection firm CPP sealed a £36 million lifeline deal.

Holgate-based CPP – fined a record £10.5 million last year for mis-selling products to thousands of customers, leaving it with a huge compensation bill – has agreed £13 million of new credit with its banks and reached an agreement to delay paying about £23 million in commission to its business partners for three years.

The firm’s bosses said the arrangements were a “real milestone” and will safeguard 725 UK employees, including 560 at its York HQ, while it may ultimately look to recruit more staff.

Some of the new financing will be used to repay customers mis-sold card and identity protection products, with CPP recently setting aside £51.7 million to cover the fine, compensation payments and other costs.

CPP’s future had been uncertain since a 20-month investigation by the then Financial Services Authority into mis-selling between 2005 and 2011.

In March, the firm said it had been unable to renew its financing arrangements, including £40 million of debt, and its US business was sold for £26.1 million weeks later.

It announced it was cutting 120 jobs in May, amid fears more losses may follow if a refinancing deal could not be struck before its existing arrangements expired at the end of September.

“This is a real milestone achievement and turning point for the group after it has been through a very challenging time,” chief executive Paul Stobart – who, together with chief finance officer Shaun Parker, will leave CPP after the refinancing is completed – told The Press.

“The current regime has been fighting fires, dealing with the difficulties caused by the past failings of the business and their aftermath. We have been trying to keep everything steady and run the business as best we can without the benefit of financial stability.

“This deal represents a three-year comfort blanket of financing which ensures we can cover our liabilities and can also fund our business plan. It provides the security for us to protect jobs and, in time and as the business grows back to strength, we can hopefully create new jobs.”

Mr Stobart said CPP now had to “return the support and faith” of its business partners and “get back to doing what we do best”. He said: “Our employees in York and elsewhere have been absolutely tremendous through this period, as they have been worried about their jobs and what happens next, and they deserve enormous praise for the way they have stuck to the task.”

CPP’s arrangement for its fresh £13 million of credit will expire in July 2016, while the £23 million in commission will have to be repaid in July 2017, a three-year extension. Chairman Charles Gregson said CPP still faced “ongoing challenges and uncertainties” but now had “a much-improved and more stable platform”.

City of York Council leader James Alexander said: “I’m pleased CPP have found a way through what we know has been a difficult time and we remain committed to supporting them in any way we can, as they work through the next phase of development for the business.

“CPP are an important employer in York’s insurance industry, and the news confirms they will remain a firm part of the city’s business landscape into the future. Importantly, the news the jobs of CPP’s employees are safe as a result of this latest development is very welcome”.

CPP shares, which stood at 300p before the mis-selling investigation, have since nosedived but rose 51 per cent to 7.75p yesterday