Shareholders in struggling furniture chain ScS Upholstery are set to be left empty-handed after the group was placed in administration yesterday and its trading arm sold to private equity.
The Sunderland company said that it was "unlikely" investors would receive a payout for their shares under the rescue deal.
But 1,300 jobs will be saved by the sale of its trading arm to an affiliate of US-based buyout firm Sun Capital Partners, c
alled Parlour Product Holding.
The deal will also see its 96 stores remain open, with administrators confirming it will "business as usual for employees, customers and suppliers".
ScS has been hit by consumers reining in spending on "big ticket" items since last summer's credit crunch, with plummeting sales leaving the group in need of extra funding.
The group has been scrambling to find a deal to boost its working capital and revealed last month that it had received an approach for its sole trading company, A Share & Sons, as part of its efforts to save the group. It warned that a sale would result in "negligible value" for the shares of parent firm ScS Upholstery.
Sun has a background of rescuing struggling British firms, having bought van maker LDV – formerly part of the collapsed British Leyland group – in 2005.
Sun, which has about $10bn (£5bn) under management, claims to have a strong expertise in the retail sector, with 24 retail investments.
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