Viridas’ administration warning over a lack of biomass support

The Leeds-based group said its African investors had decided not to pay a third payment, which was due by close of business on Monday.

Viridas chairman Stanley Wootliff said: “Unfortunately, lack of clarity from the Government regarding future support for biomass in the renewable energy industry and the reduction of greenhouse gas emissions in the UK has created a high degree of uncertainty and had a significant negative impact on the decision-making process of potential investors.”

The group had been in discussions with potential investors with a view to securing an additional £1.4m for the establishment of a farm in Brazil to grow jatropha trees for biomass fuel. Mr Wootliff said: “The directors continue to believe that environmental, geo-political and economic considerations will provide opportunities for a successful jatropha business, but in the difficult current economic and political climate they no longer believe it will be possible to raise the funds necessary to progress the Viridas project within an acceptable timeframe.”

With only a “very small amount” of funds remaining, the directors are reviewing the options.

These might include placing the company into some form of administration or other insolvency process.

It said it has the funds to settle in full all debts to its creditors, except for liabilities from the director contracts.