In a statement, the board of NDPS said that it had resolved to place the company in administration.

The board said that it had made the decision after being informed that Nipson’s major shareholders had failed to reach a “satisfactory agreement to enable the future funding of the company to be assured”.

Trading in the company’s AIM-listed shares has been suspended pending clarification of the company’s financial position, whilst a further announcement on the appointment of administrators is expected.

Nipson’s travails began last year when its manufacturing arm Nipson SAS was placed in redressement judiciaire – the French equivalent of administration.

This resulted in parent company NDPS defaulting on €2 million ($A3.2m) in Convertible Loan Notes owed to Israeli brokerage firm D Roseman, which demanded repayment on September 9.

Since then, NDPS has been locked in talks with creditors and its major shareholders in an attempt to protect the company from insolvency.

However, the situation was complicated by a dispute between Nipson’s principal shareholders, Polar and Creacorp, revolving around the legal ownership of 23 million ordinary shares in the company, which were due to be transferred from Polar to Creacorp as part of the debt-for-equity swap agreement entered into by the two parties on October 13, 2008.

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