Pickfords, England's largest and oldest company of removal contractors, is in the final stages of a sale to Team Relocations, one of its main rivals, The Times has learnt.

The move comes days after the American owner of Pickfords said that it needed a cash injection to stay afloat and risked being wound up unless a buyer could be found.

It is understood that the London-based Team, which is run by the American-born Frank Grace, is negotiating to buy Pickfords for a nominal sum in return for taking on the company's mounting debts, a £10million pension deficit and an insurance division heavily dependent on inter-company loans.

A sale of Pickfords raises questions over how many of its 1,300 staff will be retained under new ownership. One source said: “Mr Grace is no fool. He will be looking to pay nothing in return for taking on the liabilities and he likes to run a tight ship.”

Sirva, Pickfords's troubled American parent, filed for Chapter 11 bankruptcy protection last week. It said that Sirva UK, the loss-making company that trades as Pickfords in Britain, may have to be sold “in an insolvency procedure”.

Sales talks are understood to have been taking place over the past two days in New York attended by Mr Grace and Brad McCarthy, Pickfords' finance director. However, Kevin Pickford, 50, managing director of Pickfords in the UK, has been on holiday all week, company employees said. It was not clear when he would return. Calls to his Buckinghamshire home this week have not been returned.

Mr Pickford resigned as a director from 24 companies on January 7, including both Sirva UK Limited and its parent Sirva Holdings, companies filings reveal.

Mr Pickford is still registered as a director of Sirva Ireland, which trades as Baxendale Insurance and is also part of Sirva Holdings.

The division provides insurance cover that most home-movers tend to take out with their removal companies in case the company fails after they have paid the bill but before their move has been completed.

Filings in America showed that Sirva UK is owed £22million by Sirva Ireland and £38.9million by Sirva Holdings Sirva Ireland's last accounts reveal post-tax profits of £1.6million for the year to December 31, 2006, down from £2.8million in 2005.

Sirva Ireland's debts, including tax and social security liabilities, doubled over the year to £28.4 million, leaving total liabilities of £52.7 million. Liabilities were balanced in large part by £24.6 million of inter-company loans, including a £13 million promissory note to Sirva UK, rolling up interest at the high rate of 4 per cent above Libor, worth 10.65 per cent at current rates.

Most other UK removal companies, large and small, belong to International Movers Mututal Insurance, an independent Guernsey-registered captive insurer run by Willis Corroon.

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