Nexus has a 15.5% stake in PD Financial.

Nexus said it had been notified by PD Financial that its facility with its principal lender providing credit to customers for private label credit card purchases had been terminated with immediate effect.

PD Financial is in discussions with various parties to secure credit facilities or other forms of funding to allow consumer sales to recommence.

Nexus currently holds £1.43m of interest bearing loan notes in PD Financial and it says the ability of PD Financial to repay the loan as interest and capital payments fall due remains doubtful.

It adds: "Consequently, in the accounts for the year ended 30 September 2009 the Board has decided to provide against the loan in full.

"In addition, the board has also reviewed the carrying value of the investment in PD Financial and have decided to impair the value of the investment in full as at 30 September 2009."

It said this would result in will be a further charge to the profit and loss account for the year ended 30 September of £2.12m which would significantly reduce the value of the group's assets.

Nexus said trading conditions since the year end have remained challenging albeit that trading in the company's US core operations has been encouraging.

Story provided by Business Financial Newswire