Food manufacturing and packaging firm Q Cold Limited has entered administration, with staff likely to face redundancies.
Administrators Chris Stirland and Philip Watkins of FRP Advisory were appointed on 20 June 2013.
The company entered administration following a decline in trading conditions and the loss of a “key supply contract”.
Stirland, a partner at FRP, explained: “Q Cold was a solid, profitable company that specialises in suet production alongside a packaging operation but which only recently has had to bear a sharp deterioration in its trading conditions.
“The company suffered from the recent termination of a key supply contract with a major customer which had accounted for around half of the company’s turnover.
“The supply contract termination, together with an on-going dispute with HMRC relating to the reimbursement to the company of overpaid VAT monies relating to that supply contract, has put a squeeze on cash flow.”
Q Cold will continue to trade whilst administrators seek a buyer.
It currently employs around 40 members of staff, although administrators have today started an employee consultation, likely to result in job losses.
Stirland said: “By entering into administration the company can continue to trade while the joint administrators seek a buyer for the ongoing business, whilst securing the positions of creditors.
“Given the reduction in income, it is necessary for the company to reduce operating costs and an employee consultation is underway.”