UK car parts maker Wagon collapses

LONDON: Wagon PLC, the British car parts maker, is going into administration after refinancing discussions with shareholders broke down, the company announced Monday.

The Birmingham, England-based company - which employs around 6,300 people across the world - said the 500 employees it has in Britain would be at immediate risk of losing their jobs.

However, the company said jobs and operations in other countries, including the Czech Republic, Turkey, Italy, Romania, Spain, U.S. and China may be able to continue without needing insolvency protection.

Trading in Wagon's shares has been suspended on the London Stock Exchange since October, when management started trying to refinance the company following two consecutive years of losses. At that point, shares were 1.25 pence ($0.019) each.

Wagon reported a net loss of 1.9 million pounds for the year ending March 31, 2008, following a 99.4 million pound loss a year earlier. Revenues for the year were up slightly to 714.7 million pounds, from 658.7 million pounds the previous year.

Placing a company into administration is similar to filing for bankruptcy protection. Administrators are appointed to salvage as much of the company as possible for the benefit of its creditors, a process which can involve trying to keep the business as a going concern or breaking it up and selling it off.