J L French has been bought by Kaye Engineering Limited

Administrators BDO Stoy Hayward LLP say J L French in Presteigne has been purchased by Kaye Engineering Limited for an undisclosed sum.

Talks started with a prospective buyer in June, four months after the firm went into administration.

Colin Kirkby, mayor of the small market town, said it was "fantastic news".

J L French, which manufactured high pressure die-cast aluminium car components, went into administration in February after its US parent company announced restructuring plans.

The news shocked Presteigne, which has a population of 2,500, creating fears that the loss of the plant would make it a "ghost town".

There will be some losses which is sad, but losing 40 jobs to save 130 is pretty rare these days Mayor Colin Kirkby

The administrators said the sale of the site to the newly formed Kaye Engineering would "secure employment at the firm".

Mr Kirkby said: "We are obviously delighted. It's taken some time to come through and there has been a lot of uncertainty, but it's fantastic news.

"There will be some losses which is sad, but losing 40 jobs to save 130 is pretty rare these days."

Kim Rayment, of BDO Stoy Hayward LLP, said: "We wish them the very best in the future running of the company.

"I'd also like to express my gratitude to the staff at the site who have worked hard to keep the company trading during what have been very uncertain times for them."