Capital Paper (Holdings) Group, one of the largest independent paper merchanting groups in the UK, has been put into administrative receivership after experiencing "severe cashflow problems".

Administrative receivers from Kroll Buchler Phillips were appointed to handle the companys affairs on 22 November at the request of the companys directors and the Bank of America.

"The businesses continue to trade, and we are advertising them for sale as a going concern," said joint administrative receiver Lee Manning. There are already several interested parties.

Capital has suffered several large bad debts through trade clients falling into administration, including 1.45m following the liquidation of Rival Envelopes in April.

The groups last set of accounts, to 30 October 2000, showed debts amounting to nearly 27m a figure that has risen annually since 1997 with trade creditors in excess of 14m. Sales were 74m, with a pre-tax profit of only 950,000.

The businesses that have been put into administrative receivership are Capital Paper (Holdings), AJB Publishing Papers and Living Planet, which trades as Thomas Wyatt. Clarence Paper in Yeovil and Zodiac Paper in Shenfield are also up for sale.

Family-owned Capital comprises 12 businesses, eight of which are dormant. It employs over 230 people, and handles 160,000 tonnes of paper and board a year.

As PrintWeek went to Press no one from the group was available for comment.

Story by Andy Scott