Brooke Industrial calls in receivers after bank pulls plug

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The Independent Online

Brooke Industrial, the Sheffield-based engineering company in which Jourdan has a 29.97 per cent stake, yesterday called in the receivers, putting about 1,000 jobs at risk.

Shares in Jourdan slumped 36 per cent to 11.5p after it warned it would have to write off the £2.1m value of its holding in Brooke, forcing it to report a "material" loss for the six months to 31 December.

The move came after Brooke admitted it had failed to convince its banker, HSBC, to continue to support it and had been "compelled to invite the bank to appoint administrative receivers".

Michael Arnold, who is Brooke's non-executive chairman as well as a non-executive director at Jourdan, said Brooke had needed about £500,000 of extra cash to keep the company going.

"We finished talking [with the bank] yesterday [Tuesday] morning and the bank told us they weren't prepared to support it and the decision was therefore a very simple one," he said.

Attempts to restructure Brooke, cut costs and sell assets had failed to offset weaker sales. "We'd made it a leaner machine. We sold one business and were in the process of finalising the sale of another but the bank weren't prepared to support it," Mr Arnold said.

Shares in Brooke had been suspended from trading on the Alternative Investment Market on Tuesday at 6.25p as the company was forced to clarify its financial position.

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