A WIRRAL manufacturer of reusable cores used in the newsprint industry has been placed into administration in a move that could cost Merseyside Special Investment Fund more than £2m.

All 28 staff at Ultra Core were told by administrators Begbies Traynor last week that their factory was closing and jobs would be lost with immediate effect.

The firm was developing a re-useable core found at the centre of bales of newsprint. According to a director at the company, its product was being trialled by newspaper groups around the country, including Sunday Times and News of the World publisher News International. Until now, newsprint cores have not been re-useable.

The administrators had been called in by Ultra Core creditor Merseyside Special Investment Fund in response to concerns that the business was unable to fund further development work on its new product. MSIF had invested £2.3m in Ultra Core since it was set up in 2007. In addition, the North West Equity Fund had invested £600,000.

Ultra Core director Brian Burrows attacked what he said were the precipitate actions of MSIF in calling administrators. Mr Burrows said: “This business had potential going forward. We were in trials with big companies but it needed time, and something seems to have spooked them (MSIF). It’s atrocious how they treated people.”

Mark Fuller, managing director of Alliance Fund Managers, which looks after MSIF's investments, said his organisation had done its best to find a solution to Ultra Cores troubles.

Mr Fuller said: “We spent a long time trying to find a way out of this. Our ultimate conclusion was that we could not see one.

“It was up to management to come up with a plan. Had they come up with one that was appropriate, we would have backed it.

“We did everything we could before we called in the administrators, but it is out of our hands now.”

Administrator Paul Stanley, managing partner at Begbies Traynor, said: “Ultra Core had lost £700,000 last year and was losing £15,000 a week. It was a development company which had huge cash burn.”

Mr Stanley added that, while the business was not continuing as a going concern, he hoped to be able to sell the intellectual property underpinning the reusable cores and recover some funds for creditors.

He said that, with trade and other creditors included, the total deficit would exceed £3m.

billgleeson