Bankers yesterday pulled the plug on one of the Black Country's most famous metal bashing companies, putting nearly 1,000 jobs at risk.

Engineering and hardware group Eliza Tinsley, which traces its history back to the 1850s, was forced to apply to the High Court to go into administration.

The 155 year-old business was last night in the hands of joint administrators David Duggins and Ian Best of the Birmingham office of Ernst & Young.

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They were continuing to trade the company as a going concern while looking for potential buyers.

The collapse into administration followed ultimately fruitless talks between the company and its bankers with a view to establishing new credit lines.

Details of the crisis engulfing the company were sketchy, but sources suggested it had fallen victim to the general downturn in the UK engineering sector.

AIM-listed Tinsley, which in December reported an interim loss of #551,000, rang the alarm bell when it asked the London Stock Exchange to suspend trading in is shares, which had closed on Monday at 9p.

"The company has identified a significant short term cash requirement and is in dialogue with its bankers regarding the necessary facilities," it said in a statement released to the market at 7.30 am.

The Birmingham Post was later told that directors including chief executive Andrew Hall and chairman Michael Borlenghi were in talks with Tinsley's banks, listed in one City directory as Barclays, Bank of Scotland and Fortis.

A second statement at 1.34 pm said: "Further to the announcement made this morning, the company has been informed by its bankers today that its request for additional facilities has not been accepted.

"As a consequence the directors are making an application to the court for the appointment of an administrator over the assets of the company."

The company was formed when Eliza Tinsley took over her husband's nail-making business in Old Hill when he died in 1851.

She relocated to Cradley Heath in 1853 and the business grew into one of the biggest of its kind in the Black Country nail-making industry employing about 4,000 people at its height.

Today, Tinsley, now based at Brierley Hill, has two divisions employing 980 people at seven factories in the UK and in the US and Italy.

Its consumer products division is the UK's largest supplier of chain, rope, hardware and accessories for the DIY, agricultural, building, engineering, gardening and marine markets.

The off-highway division designs and manufactures components for heavy construction vehicles.

Tinsley, whose balance sheet is 294 per cent geared, reported a pretax loss before exceptional items for the six months to September 30, 2005 of #551,000 compared with a profit of #85,000 in the same period the year before.

However, half-year sales had risen by some 11 per cent to #41 million and Mr Borlenghi said although the UK operations were suffering, the overseas divisions were doing well.

Earlier in the year Tinsley successfully negotiated a restructuring of its worldwide banking facilities after declaring a profit for the year to March 31 of #129,000 compared with a #3.4 million loss the previous year.

Its share price surged to 171/2p in September when Tinsley announced that it had received a potential takeover approach.

But the company had to report a month later that the talks had been terminated.

Mr Duggins said: "The company has a rich history of manufacturing in the region and has an excellent reputation amongs the world's leading off-highway construction equipment manufacturers and the UK's DIY retail outlets.

"The group of companies has an extensive blue chip client base and boasts some world class manufacturing facilities.

"We are working hard to avoid disruption to the group's customers and are continuing to fulfil all orders."