124 jobs at risk at Universal Engineering in Llantrisant and Weymouth

A supplier for the oil and gas industry has said it expects to be placed into administration, putting 124 jobs at risk.

Universal Engineering opened a new factory last year in Llantrisant, Rhondda Cynon Taf which has 81 workers.

It followed £600,000 of a planned £2m investment from the Welsh government with hopes of expansion and another 200 jobs.

The company also has a plant in Weymouth, Dorset, with 43 workers.

It blamed declining investment in the oil and gas industry.

It is understood workers were told to go home and return next Tuesday, to hear of developments.

The company said at the moment staff are only at risk of redundancy and a decision would be taken once the administrator was appointed.

It insisted the £600,000 paid in grant funding by the Welsh government was not at risk.

The Welsh government called it "very disappointing news".

"We will work closely with the company to try to find a buyer for the site and offer support to the employees to find new work," a spokesman added.

Chairman James Gaggero met with staff in Weymouth to tell them the bad news and said the company would work with the administrators to try to find a solution.

"It's awful to have to accept that circumstances have conspired to make this business vulnerable to this situation," he said.

The company was set up in 1959 and taken over in 2009.

Henry Game, the chief executive of parent company Bland Group UK, added: "We deeply regret having to take this decision. We appreciate that this will be a very difficult time for all employees and we will try to provide as much information and support as we can during this process."

It had been looking to expand into the defence and aerospace sectors and take on 200 workers.

The new plant in Llantrisant was only officially opened four months ago with Economy Minister Edwina Hart saying it was "exactly the type of advanced manufacturing investment we want to attract".

Universal said it had received a £600,000 first stage of Welsh government money in March 2015 on condition of a specified number of staff being hired and was at "pains to stress" the money was safe.

"This is the only grant that Universal Engineering has been received and it is not at risk," said a spokesman.

"The directors acknowledge the extensive support from the Welsh government at all levels and thank them for all they have done to support the establishment of the site in Llantrisant."

The Welsh government added: "We are in discussions with the company about recovering the finance we provided them to create jobs."