Shares in struggling cashmere and knitwear business Dawson International have been suspended as the company considers going into administration over its huge pension deficit.

The move follows the serving of Notices of Determination of Contribution on Dawson’s parent company and UK subsidiary Dawson International Trading Ltd by the actuary of its UK defined benefit pension plans.

Dawson said company directors would consider the validity of the notices and decide whether or not to appoint administrators for either or both companies, suspending Dawson International shares in the interim.

It stressed that the situation did not affect US knitwear business Dawson Forte, which it said was “well-funded” and would continue to trade normally.

The news follows Dawson’s announcement on 20 July that proposals to put its pension plans into a protection fund had been rejected following unsuccessful talks with the Pension Protection Fund and the Pensions Regulator.

Administration would put at risk 200 jobs at the company, which recorded a 52% cut in first-half profit to GBP0.62m (US$0.97m).