Soup maker Redemption Food Company has been rescued from administration after suffering “significant financial challenges” during the pandemic.

The Country Durham-based foodservice supplier has been bought from administration via a pre-pack deal, saving all 21 of its jobs.

The business was forced to appoint FRP as administrator after struggling to recover from the Covid shutdown of much of the foodservice sector.

On FRP’s appointment on 12 August, a pre-pack sale of the business and its assets was immediately secured and all roles were transferred.

The supplier of ‘ready to heat’ soups, stews and street bowls to restaurants, hotels, and airlines will continue to operate under the Redemption Food Company name under the ownership of existing management.

“The disruption we saw across hospitality and travel put a significant amount of pressure on businesses right through their supply chains and forced many to pause their operations for some time,” said David Willis, partner at FRP and joint administrator. “As a supplier to those industries, Redemption Food Company was no different and suffered from a sustained period of challenging trading conditions that impacted its finances.”

“However, Redemption will get an opportunity to rebuild in a new venture led by senior members of the incumbent management team,” he added. “This deal has secured the transfer of all roles and provides the opportunity to continue trading.”

In late 2020, the business received six-figure backing from The North East Fund, a regional venture capital operation backed by the European Regional Development Fund and the European Investment Bank.

The loan, from the NEL Growth Capital Fund, was to help Redemption Food to manage its cash flow and retain most of its staff as it returns to more normal trading conditions following Covid shutdowns.

Commenting on the administration, Dr Yvonne Gale, chief executive at NEL Fund Managers, said: “All our investment decisions are made after the completion of very detailed and strict due diligence processes.

“We have a very strong track record of achieving substantial returns for fundholders over almost three decades of investing in businesses across North East England, as well as enabling our entrepreneurs to create new jobs and contribute to the robustness of the regional economy.

“The very nature of our industry dictates that not every single investment will be successful, and we are saddened that suppliers and other creditors of the Redemption Food Company are now facing unexpected losses.”