Carpet firm first to seek pensions rescue

STODDARD International could be one of the first firms to claim compensation from the new Pension Protection Fund. Its 1,800 pension scheme members are facing a possible £50m black hole - unless the PPF steps in.

The Scottish carpet maker announced plans to close after receivers Ernst & Young failed to find a buyer. It is losing £100,000 a week. Management failed to get backing for a buyout.

Stoddard's 179 staff in Kilmarnock will lose their jobs, following on from the 266 redundancies made when it went into receivership last month.

Timing is crucial for the pension scheme members as the PPF only comes into effect on 6 April.

The Stoddard scheme has a £50m shortfall - which works out at nearly £28,000 per member, though 800 members who already claim a pension will be less affected.

Ian Gordon, chairman of the scheme's trustees, said: 'We are cautiously optimistic that we will qualify for help from the PPF, provided the company does not go into liquidation until after 6 April.'

Tom Burton at Ernst & Young is hopeful the assets can be sold while Stoddard remains in receivership. He blamed 'chronic overcapacity' among UK carpet manufacturers and competition from overseas.