Viridas facing administration

The Leeds-based firm has been aiming to produce oil from the jatropha plant, an inedible but highly-calorific plant which grows in Brazil.

It said, however, that it had been unable to raise the £1.4m needed to set up the farm and blamed a “lack of clarity” from Government over future support for biomass for holding back investors.

In a statement today the firm said it remained optimistic about the potential for a jatropha business despite its own difficulties.

“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.”

It said the possible financing from African investors, using Viridas as a quoted vehicle, had not been carried out the latest payment due had not been made.

Viridas added: “In view of the above and the very small amount of funds remaining available to the company, the directors are reviewing the options available to the company which might include placing the company into some form of administration or other insolvency process.

“At the moment the company has the funds to settle in full all creditors of the company with the exception of liabilities arising from the director contracts.”

If it manages to stay in business then Viridas will have to seek shareholder policy for a new investing policy.