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HLM Architects has put its plans to seek a stock market listing on hold, citing recent market volatility and the loss of confidence in the support and technology sectors.

The firm said it was reviewing its options for a reverse takeover of listed advertising group Osprey Communications.

The announcement came as financial difficulties emerged at Osprey London, a subsidiary of Osprey, which is seeking a corporate voluntary agreement to pay off debts of £170 444.

Osprey London was sold to marketing firm Sevco 1156 in September, but Osprey was unable to pay all of the subsidiary's creditors with the proceeds. A creditors meeting is due later this month.

An HLM statement said that the delay in plans for the stock market listing was agreed in the summer allowing Osprey to restructure the company.

The statement said: "This [decision] allowed time for the management of Osprey to dispose of a number of its business to reduce its requirements for additional finance. The CVA relating to part of the group is presumably a result of the exercise." The practice announced its intention to go public and create a "total branding" company in April, which would have made it, along with Aukett Europe, the second listed architect in the UK.

Chairman Chris Liddle said the firm is currently working with Osprey Communications subsidiary Osprey RMA to develop a total branding concept on a number of building projects, including a major hospital PFI scheme.

HLM is looking to provide architectural services to clients such as the NHS as part of a design package that would include communications materials, leaflets, maps and advice on corporate identity.

Shares in Osprey Communications were suspended in January following pressure from investors because its shares performed poorly in relation to the sector as a whole.

Osprey Communications made a pre-tax loss of £957 000 on a turnover of £18m: HLM made profits of £2m on sales of £8m last year.

HLM is a PFI specialist with a portfolio of projects worth more than £500m. It also plans to export its PFI skills abroad; it is currently working on early designs for the £50m redevelopment of a hospital in Soweto.

The firm had planned to create a combined firm of 250 staff worth a market capitalisation of £20-25m with the Osprey deal. Aukett, the only other listed architect, is worth about £14m.