Pinnacle Staffing Group has suspended trading of its shares on AIM with immediate effect pending clarification of its financial position, at the request of the public sector recruiter.

The group says that since an announcement on 8 April, it has succeeded in cutting its overheads and also made “significant progress” in reaching agreement in principle, with certain major creditors of the company to either convert outstanding liabilities into equity, or to agree to pay debts over a longer time period.

However, the firm says talks it had been having with a third party investor to effect a reverse takeover of the business and which would have allowed the introduction of capital to the business have ended.

Pinnacle adds that its doctors recruitment subsidiaries, Holt Doctors and Medic International (owned 75% by the firm’s principal subsidiary, PHC Luton), continue to trade acceptably, but still require further capital.

The board intends to appoint an administrator to PHC Luton.