A WORM farm in Northumberland which is linked to world leading medical research has been bought out of administration by a Scottish company.
The Newcastle University spin-out company had become the world’s biggest producer of lugworms for sea-fishing bait since being founded in 1985 as well as recently becoming involved in research.
But it ran into cash-flow problems over the last couple of years before going into administration six weeks ago. It had already written off nearly £600,000 of debts after an attempt at expanding into the US, lost a distribution deal in the Far East and made a loss of more than £1.1m last year.
Administrators Ernst & Young had continued to trade the business, which is based at Lynemouth near Ashington, but had made most of its 27 staff redundant. But it has just been bought by Dundee-based Mermaid Sustainable Resources for an undisclosed sum from Ernst & Young.
Corporate finance manager Gurpreet Singh Jagpal at Ernst & Young in Newcastle said: “We received a great deal of interest in the business from as far afield as the Americas and the Far East. The sale has retained worm farming and the associated research and development in the North East.”
The new owners will work with the existing management now look at rebuilding the award-winning firm, which had opened the world’s first temperate marine worm farm, and was run off waste heat energy from the nearby power station.
In 1998 groundbreaking advances enabled Seabait, which grows worms four times faster than in the wild by feeding them brewery waste, to expand into producing specialised diets for shrimp and farmed fish.
And its name rose further in 2006 when it was hired to farm lugworms to be used in a research project – backed with funding from Buckingham Palace. It was a project which was set to revolutionise the medical industry. At the time it was anticipated worm blood could be used to help cancer patients, stroke victims and those who suffer severe trauma injuries. The research, carried out in partnership with French company Hemarina, was hoped to help save millions of lives.