HORNBY, the Margate-based model and collectibles group, is in line to buy part of Lima, one of the best known model railway companies in Europe.

The company said this week that a court in Brescia, Italy, has signed a decree that allows the liquidators of Lima to accept Hornby's offer of 8 million Euros to acquire certain assets of Lima.

Hornby chief executive Frank Martin, said: "We are delighted that the Italian court has recognised the merits of our offer. Now, subject to our due diligence, we hope to complete the acquisition before the end of the year. We are excited by the potential for the Lima brands, which alongside our Spanish operation Electrotren, will form the platform for our expansion into key European markets.

“Over the long-term we are confident that this will also increase our rate of growth in America.”

Lima has recently suffered from poor cash flow and was forced into liquidation in 2003.

A Hornby spokesman said: “The board is confident that it has the skills and experience to re-invigorate Lima’s brands. This will be achieved by reducing production costs by outsourcing production to third party specialists in China and concentrating on improving sales and distribution channels to ensure a recovery in sales in key European markets. “Hornby intends to maintain Lima’s current product lines. The bulk of the company’s assets are detailed product moulds; initially these will be moved to Hornby’s site in Margate before dispatch to China.

“Hornby has implemented this outsourcing strategy successfully with its own Hornby and Scalextric brands.”