MORE than 200 jobs at a Kidderminster forge are under threat after the company, at the centre of a buy-out row last month, went into administration.

United Engineering Forgings, which employs 1,595 people including 217 workers at Kidderminster, faces "significant cost-cutting," according to KPMG which was appointed administrators by the High Court last week.

KPMG said the group had suffered losses over the last two years and been unable to complete a restructuring. Myles Halley, KPMG joint administrator, said: "We will work with the management and union to view what needs to be done and are hopeful that a buyer for all or part of the business can be found."

UEF was formed in 1997 from the forgings division of British Steel and has a turnover of around £120 million a year. The firm supplies components such as axle beams to heavy commercial vehicle manufacturers.

UEF hit the headlines last month after workers claimed they were kept in the dark about buy-out talks between the firm's shareholders and an Indian-based firm.

Patrick Connolly, chairman of shop stewards at the Kidderminster plant, said PPN Ventures, the leading shareholder in UEF and part of the Prudential group had gagged UEF management from talking about the future of the company and its possible sale to the Bharat group. Workers fear if the sale goes ahead, their jobs will be lost to India. He described the mood at the site as "resigned" and said workers were expecting a further announcement this week.

Bob Bates, UEF's chief executive, said: "Even though this is a difficult day for the company, UEF has a strong market position and a high level of customer confidence with long-term contracts going forward.

"The group has been in discussions with interested parties in the last 12 months. A deal could not be concluded within the necessary time and therefore a petition was presented for the group's administration."

A spokesman for KPMG last week added: "The firm is still trading. It's still business as usual."