Food & Drink Group (FDG), the AIM-listed operator of the Jamies Bars and Henry J Bean's chains, has today been placed into the hands of administrators at BDO Stoy Hayward.

The move, revealed by Times Online last month, will see the sale of 17 of FDG's 28 outlets, most of them in London, to Mainpaint, a new company backed by NBGI Private Equity and headed by Nick Tamblyn, a former director of First Leisure and erstwhile chief excutive of Chorion.

Mainpaint is acquiring three out of four Henry J Bean's oulets - in Chelsea, Wimbledon and Manchester - together with all five Jamies wine bars in the City of London and nine unbranded bars. It will also take on 17 Henry J Bean's franchises, most of them international.

The sale price has not been disclosed, although FDG confirmed that the disposal was "not expected to result in any return to shareholders".

In a statement, the FDG board said: “The group has been facing the most challenging economic conditions for decades which has reduced operational performance and has restricted investment in its brands.

"These conditions have prevented the group raising the further financing it needed. The sale of the business has secured the jobs of 300 of the group’s employees."

However, BDO Stoy Hayward confirmed that it had been unable to sell the remaining 11 sites as going concerns, resulting in 125 redundancies. It is now canvassing interest in the 11 leasehold premises separately.

Shay Bannon, business restructuring partner at BDO Stoy Hayward, said: “A reduction in the amount of disposable income as a result of escalating living costs and household bills have played a role in the Food and Drink Group’s current difficulties. This has been further compounded by a period of wet weather which has failed to boost sales during the summer.”

In June, FDG asked for trading in its shares to be suspended on AIM while it attempted to resolve the financial crisis precipitated by April's dire warning on profits.

One of the options it had been looking at was a reverse takeover of 3D Entertainment, the bar operator in which Luminar, the nightclub operator, has a 49 per cent stake. Stephen Thomas, the FDG chairman, is also chief executive of Luminar.

However, ordinary shareholders had long since given up hope of getting any of their money back after seeing the value of their holdings dive by 96 per cent over the past 12 months. The shares were suspended at 10.25p, valuing the equity at just £581,000 against a debt burden of at least £9 million.

The collapse into administration will be a disappointment to Mr Thomas, who became chairman in 2000 as part of an ambitious turnaround strategy.

The group, previously called Hartford, had enjoyed a high profile through its ownership of Pharmacy, the trendy Notting Hill eaterie decked out by the artist Damien Hirst, but a series of profit warnings sparked a strategic and financial overhaul.

But the gradual restoration of its fortunes was halted by factors including the smoking ban and the consumer spending downturn. FDG put itself up for sale at the start of this year after being foreced to admit that it was too small to prosper on its own in the current climate.

FDG is the latest in a string of corporate failures in the pub and restaurant sector in the wake of the toughest trading conditions since the recession of the early 1990s.

Recent victims have included the Laurel Pub Company, CanDu Entertainment, Sports Cafe Holdings, Bar Sport, Herald Inns and the Massive Pub Company.

NBGI Private Equity, formed in 2000 to invest in small to medium-sized businesses, said it planned to use the deal as a platform for further acquisitions in the sector.

Debt funding for the transaction was provided by Barclays.

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