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Waste management group Compact Power (CPO:AIM) has effectively gone bust after trading subsidiaries holding its treatment plant and IP were forced into administration.

One of the company’s main investors who had loaned the business thousands of pounds demanded immediate repayment after Compact Power failed to secure financing for a second waste treatment plant.

Without enough cash to repay the investor, Compact Power had no choice but to call in the administrators.

Its treatment facility in Bristol remains operational and could be sold within days. It is understood that a private waste management group is preparing to hold talks to buy the plant and IP.

Shareholders are unlikely to get their money back. Chief executive Nic Cooper is understood to have lost several millions of pounds through loans to the company and a large shareholding in the business. He wouldn’t quantify the figure, merely saying: ‘I have lost a substantial amount of money. It’s been 15 years of my life.’

Compact Power’s first waste treatment plant had been operating at break even. The company had received £5 million funding from Defra to help develop a second plant which would treat household waste from Bristol City council.

A private investor had intended to head a consortium which would fund the second plant’s construction – thought to cost £20 million.

Shares in Compact Power were suspended in September as it continued to negotiate funding terms. According to Cooper, the private investor lost patience earlier this month and demanded the return of all monies loaned to the business to help it keep trading.

The plc company is now an empty shell with no cash or assets. It is most certainly going to be delisted in February. Under Aim rules, a company’s listing is cancelled automatically if they have been suspended for six months and not addressed the situation which caused trading to be halted.

The administrator Pitman Cohen could not be reached for comment as Shares went to press.

Shares says: A disappointing end to a promising business.