Office provider Regus has admitted that trading losses prompted it to consider placing its US subsidiary into bankruptcy.

Regus, which six months ago touted its abilities to weather recession, has said that its US unit ran up a �9.7m loss in the first three months of the year.

The firm considered making the division the latest of a line of US businesses, hit by economic slowdown, to file for Chapter 11 protection from creditors.

But the renegotiation of contracts with landlords, amid a cost-cutting strategy aimed at saving $20m a year, has rendered the Chapter 11 threat "remote", a statement on Wednesday said.

Reversal of fortunes

"We have successfully repositioned our US business with the assistance and support of our US landlords," chief executive Mark Dixon said.

Mark Dixon: Negotiating tougher times

"We believe our US business is now better placed to face the continuing challenges ahead in the US."

The announcement followed a report in the Sunday Express newspaper that the firm was mothballing half the capacity in its 90-strong US office network.

A bankruptcy filing would have been a further setback to Regus, which grew from a single-property operation founded by Mr Dixon in Brussels in 1989.

Popular concept

Regus' serviced office concept proved sufficiently popular that the firm now boasts more than 400 business centres, accommodating 92,000 workspaces, in 50 countries.

But a profits warning in July hit Regus shares, once a darling of the stock market.

And while the firm forecast in November that it could benefit from economic slowdown, as business sought refuge in flexible premises, the shares have failed to approach the high of more than 390p hit in February last year.

The company two months ago lost its place among the FTSE 250 list of mid-ranking London-listed shares.

On Wednesday, Regus shares stood 0.5p lower at 40.5p in midday trade.