Railcare, which refurbishes the train fleet and has offices in Glasgow and Milton Keynes, was put into administration yesterday following a failed takeover and the aborted franchising process of the West Coast Mainline.
Bryan Jackson, of the administrators BDO, said: "Unfortunately the economic climate and difficult trading conditions significantly affected the business, together with reduced demand.
"However, we are hopeful of securing a sale and, depending on customer requirements, the company may continue to trade whilst this is explored."
The alarm was raised when the company was unable to pay its staff on the 31st July. This would have most likely have been because the bank would not allow the staff to be paid or they even froze the account. The firm could have breached their loan limits or indeed there simply was not the cash available.
The firm is now looking for a buyer. This if often regarded as giving a "better result" for creditors than just winding up the business and distributing the assets to creditors. See our page on trading out and administration sale.
There is a lot of pressure from unions on the government to step in with funds as "£1m is all that is needed" and Vince Cable has said;
"This is an important company in the supply chain and it is vital that key engineering skills and jobs are not lost. "My department has been working with the company to try and find a solution. I hope a resolution can be reached soon."
Trouble is that if an "important company" is not making any money has it got it right?? Are HMRC owed money for instance.