CRISIS-hit home furnishings group Courts has gone into administration after banks pulled the plug on its debts.

The troubled company, which was founded in 1850 and has been struggling to restructure debts of £280m, said it would seek to appoint administrators to run the company.

Shares plunged to an all-time low of 13p before they were suspended yesterday after a string of troubles at the UK division and the impact of Hurricane Ivan on its Caribbean operation hit the business.

Courts has more than 350 stores worldwide, including about 100 in the UK.

The stock lost half its value on Friday when Courts outlined plans for a financial overhaul that would lead to a significant dilution of shareholder value.

But its lenders refused to let it wipe out its debt through a debt-for-equity swap, forcing it into the hands of administrators.

Courts had also hoped the banks would let it defer certain debt payments and would grant it extra funding.

It said: "The board has been informed that the principal lenders will not grant waivers for the covenant breaches likely to occur shortly, nor will they provide immediate additional funding required."

It follows a string of profit warnings during the year amid flagging sales in the UK, where consumers have been cutting back on spending.

Earlier this month, Courts revealed that same-store sales at the UK division were 20 per cent lower, which meant the operation would be loss-making in the second half of its current financial year.

Courts has been trying to overhaul the UK division through measures such as strengthening its management team.

The impact of Hurricane Ivan on its 91 stores in the Caribbean also contributed to the most recent profits warning.