Albemarle fears for future as it scraps attempts at a sale

Beleaguered investors were told: “Depending on the final outcome, there may be limited value attributable to the ordinary shares.”

Analysts said it looked likely that the company would go into administration.

Plunging gold prices and competition have left the group struggling with losses and overstretched finances, resulting in it putting itself up for sale last month.

The company said it received a number of expressions of interest including from Jon Moulton’s Better Capital. It was also reported that rival pawnbroker H&T was considering a bid.

Other potential buyers for the group, which includes Leeds-based Herbert Brown jewellery and pawnbroking stores, were said to have included its biggest shareholder EZ Corp, the US pawnbroking giant, as well as US fund Apollo Global Management.

But Albemarle received an unwelcome present when it said on Christmas Eve that Better Capital had pulled out.

Yesterday it said that none of the proposals it had received “were deemed to represent a fair value for the company” and it had decided to terminate the formal sale process with immediate effect.

In a statement, it said it had been given a further reprieve by its lenders until March 31 while the board “continues to explore alternative options to maximise value for all stakeholders”.

Albemarle warned recently that earnings would be significantly below expectations and admitted it had resorted to melting down gold jewellery stocks to raise cash. It has reduced the size of its estate to under 200 sites, having closed its pop-up gold buying stores.

There has also been a mass exodus of board directors, with five of its six non-executives quitting at the start of December.