The company, which formerly traded as AbitibiBowater Recycling Europe, has been purchased as a going concern for an undisclosed sum, safeguarding all 40 jobs.

Joint administrators Tom Jack, Roy Bailey and Alan Bloom were appointed to the company on 11 February, following their appointment to BPCL on 2 February.

The administrators have subsequently sold the business and assets of the company to Palm Group subsidiary Palm Recycling – the name the company will now be known as.

Wolfgang Palm, Papierfabrik Palm's chief executive, said: "For Palm Paper, this means long-term, secure supply of fibre for our King's Lynn mill, while Palm Recycling will work with the company's business partners to provide continuity of service from the existing operations team."

Ron Humphreys, Cheshire Recycling managing director, added: "I am thrilled that we are able to quash any uncertainty about our future so quickly."

The company provides waste management services to local authorities throughout the UK and operates from Ellesmere Port, Cheshire.

Humphreys said: "We've got significant experience in the recovery of high-quality paper for the UK domestic market, and we are a well-respected and experienced business."

The company introduced paper banks into the UK 25 years ago, which Humphreys claimed had helped to pioneer door-to-door recycling, which has expanded to include multi-material collections.

Ernst & Young's Jack said he was delighted to conclude the successful sale of Cheshire Recycling, safeguarding all 40 jobs and securing a future for the business.

Production at AbitibiBowater's UK-based subsidiary Bridgewater Paper Company (BPCL) has now ceased and some 300 staff have been temporarily laid off at the recycled newsprint mill following its move into administration.