A SCOTTISH pallet company has stepped in to save the last seven jobs at the ill-fated Sharp Bros Timber, of Melbourne, near Pocklington.

Sharp Bros, otherwise known as Sharp's World Of Wood, went into administration earlier this month owing more than £1.473 million.

There were 24 redundancies, although seven people were kept on by the administrators to retain the pallet area.

Now negotiations are being finalised for Marlaw Pallet Services, of Strathclyde, to buy the premises and business at The Sawmill, in Kidd Lane, Melbourne, for a total of £640,000.

Stuart Mackellar, joint administrator with Kroll, said: "The sale process is ongoing. We expect to complete in a week or so. The seven jobs have been saved and there is a prospect of additional employment as the business picks up and benefits from the financial strength of the new owner."

But even after the deal, there would be a cash shortfall "and creditors will not receive full payment of their debts," he warned.

Marlaw Pallet Services was one of 22 expressions of interest in the business and assets of the company put up for sale by the administrators and was one of three parties who made formal offers.

As soon as Marlaw was chosen, the Scottish firm agreed to buy a pallet line and ripsaw at the York company for £240,000 from Barclays Mercantile Business Finance (BMBF), which had financed it.

That still left a shortfall in money owed by Sharp's to BMBF of £67,000

Sharp's, of which Dennis Allen Sharp was a major shareholder, ran into problems after investing in "a significant piece of equipment and the withdrawal of a key customer".

The tragedy was that the business had been put on the market by the Sharp family for months offering exclusivity to the main interested party, but eventually rejected the bid as unacceptable.

Through a local agent, a number of other interested organisations came forward.

But it was too late. Cash flow problems mounted and administrators were appointed on September 16.

Sharp's initially specialised in providing timber to the mining industry, then diversified into pallet making and retailing, claiming to be the largest stockist of timber products in the area.

Updated: 11:03 Thursday, November 17, 2005