CAKE company Inter Link Foods has been suspended from the stock market after its bankers refused to wipe out some of the firm's debts.

And chairman Jeremy Hamer said the action was taken after rival Irish-based food firm, McCambridge Group, pulled out of takeover talks when Inter Link's bankers refused to reduce debts by "several million."

Mr Hamer said the market value of the company was lower than the debts, meaning shareholders would probably not receive any money from any sale.

Inter Link yesterday requested that the Stock Exchange suspend trading in the company's shares on the Alternative Investment Market (AIM).

The company employs about 500 people in Shadsworth, Blackburn, and makes confectionery for global brands such as Disney.

It also has another 11 bakery sites across the UK and one in Poland.

As part of the deal Mr Hamer said that McCambridge had agreed a price to give to Inter Link shareholders if bankers wiped off some debts.

Following the decision, shares were suspended to stop shareholders losing more money.

Mr Hamer said Inter Link bosses were in talks with six other private and trader investors about buying the company and he expected McCambridge to table a new bid.

He said: "We are continuing to trade and I am very optimistic we will get a long-term solution that will retain employment and sales "It is most likely to involve a sale of the subsidiaries.

"Nobody has offered £63million so the shares cannot have any value because £63million would not pay off the debts."

In March Inter Link issued a profit warning predicting loses of £7million blaming a lack of trading confidence in the firm which owns the Soreen malt loaf brand.

Sales have dropped and the firm's share price fell under the 100p mark from a high of 770p last year.

Last month Ian Croxford, replaced Chris Thompson as chief executive, who had only been in the post since December and had failed to turn the company around.

Earlier this year Alwin Thompson and Colin Davies who founded Inter Link in 1994 stepped down.

The firm's turnover in the last financial year was more than £130million.