ADMINISTRATORS have moved into a Newport company because they owe £500,000 to creditors.

Steel and structural fabrications company MD Fabrications of Queens Hill collapsed this week after Managing Director Bob Evans confirmed a number of "contracts fell through," leaving the company financially crippled.

Receivers Begbies Traynor went into the factory this week and told the 20 employees they were all out of jobs.

One employee, who had worked at the company since it opened 20 years ago, said the workers were totally stunned.

"These men just walked in and told us to leave, no redundancy pay or anything.

"We have been treated like dogs, the company has no regard for the workers. I've still got a mortgage and bills to pay with no idea of how I'm supposed to do it.

"We feel totally worthless."

MD Mr Evans said the firm's hand was forced after it found itself unable to pay VAT bills.

He said the company was placed in administration to protect it from the taxman and to give greater benefit to creditors.

Mr Evans, who is the majority shareholder in owner Tryst Holdings, the parent company of MD Fabrications, said he couldn't say what will happen with the company until administrators make an assessment of its assets.

He said: "When we took over the company in January 2007, we discovered there were several contracts with disputes attached to them.

"As a result we did not receive the cash for these jobs, which left us short by £250,000 and meant we could not pay off our VAT bill."

He said the firm owed £500,000 to its bank in the form of overdrafts and loans.

Employees will need to apply to the government for outstanding holiday and redundancy, he added.

Steve Wade of Begbies Traynor said the firm was put into administration as a result of creditor pressure.

He said the future of the site will not be decided until the company's assets are accounted for.