Nearly 30 people lost their jobs after a 40-year-old sign-making company collapsed, owing £760,000.

Owners of Autosigns put the firm into liquidation in February after the business, which produced signs mainly for used car dealers, saw sales plunge last year due to the downturn.

However, a businessman who has bought the name and assets of the firm said he was keen to get it "back on track" and had begun employing some of the 29 staff who lost their jobs.

Steve Ball, who worked for the company for 10 years in the 1980s and 90s, said he had taken on "fewer than 10" of the staff so far, but hoped to employ more.

Nearly £300,000 of its £760,000 in debt is owed to bank NatWest, while the rest is owed to 100 suppliers and other creditors, who, liquidators have said, were unlikely to be repaid.

Ole Rasmussen, who ran the firm, in Frog Island, Leicester, with his wife, Ana, said turnover had plunged from £3 million in 2007 to £2 million last year.

Mr Rasmussen, 67, blamed the problems on the global downturn in the car industry. As dealerships sold fewer cars, they needed fewer signs.

Fifteen staff had to be made redundant at the struggling business last summer.

Mr Rasmussen said: "It's a shame after all this time. We supplied about 40 companies around the world but when nobody is spending money with you, it's hard to continue."

One former worker, who did not want to be named but who had worked for Autosigns for over 30 years, said the collapse of the business had left a number of staff in serious financial difficulty.

He said: "There are some who have been left in a desperate situation moneywise.

"It wasn't really a shock because we'd seen it coming after the other redundancies last year.

"I've been able to find another job and I'm learning new skills, but others are still out of work."

Mr Ball, who paid an undisclosed sum for the company's assets with a business partner, said: "It's synonymous with the industry. I'm passionate about it. We want to make it efficient as a business and employ as many as we can afford."

He said the new business had started trading under the Autosigns name from the Frog Island site three weeks ago but might move.

Situl Devji Raithatha, of liquidator Springfields Business Recovery and Insolvency, in Hinckley Road, Leicester, said the sale had not generated enough to repay the bank in full – meaning other creditors were likely to be left empty-handed.