THE future of a Newtown factory hangs in the balance as its owners seek to place the business in administration.

A buyer is being sought quickly for F1 Modular, based on Newtown's Mochdre Industrial Estate.

Ashley House PLC, the parent company is looking to appoint administrators to find a buyer for the firm, which produces construction modules and pods, such as timber frames, for new builds.

The company employs around 50 people at its factory in Newtown but its most recent accounts submitted to Companies House showed a loss of more than £1.2 million, almost half of its turnover.

Ashley House PLC Chairman Tony Walters confirmed that while a buyer is being sought, in the meantime it is business as usual for the factory and its employees.

He said: "We can confirm that F1 Modular has filed a Notice of Intention to appoint an administrator, whilst the business seeks a buyer or investor.

"Work continues in the factory for the time being."

In a statement on the Ashley House website, the parent company explains that creditors are intending to take action for non-payment, but that F1 Modular is also owed more than £1 million from its own debtors.

If no buyer is found, the factory is likely to go under.

The statement says: "The company (Ashley House PLC) and F1M will work together over the coming days to seek, in the absence of a funding solution, a sale of this subsidiary.

"F1 Modular has instructed a firm of accountants to pursue a swift search for a buyer, and discussions with two parties are already underway and will be included in this process."

"The company continues to pursue the funding required both to meet its ongoing working capital commitments and to support its affordable housing strategy.

"Although progress is being made, if ultimately unsuccessful or not achieved in timely fashion and in the absence of other sources of funding, the company will not be able to continue to trade as it would be unlikely to be able to honour its obligations to creditors."

"The Company continues to urgently pursue legal remedies to recover long overdue receivables in excess of £1m. The board will continue to update the market as to progress on the above."