Photobition, the UK's largest provider of shop display graphics, collapsed into receivership yesterday after failing to secure additional funding from its bankers. Some 1,900 jobs worldwide are threatened, including nearly 1,000 in the UK.
Arthur Andersen has been appointed administrative receivers of the publicly quoted company, but not of its trading subsidiaries, which will continue to operate. The management of the main trading division, Photobition UK Graphics, created a new company yesterday called Service Graphics.
The new management team said: "We are confident that, without the problems associated with Photobition's parent company, and with the continuing support of our long-established client base, Service Graphics has a bright future."
Eddie Marchbanks, Photobition's chief executive, said the impact of the terrorist crisis, which had already hurt sales, counted against the firm during negotiations with its bankers, Royal Bank of Scotland. "The banks did not want to lend further money on the basis of concern over trading prospects in the US and could not be sure how much further funding would be required going forward," he said.
Photobition collapsed with debts of more than £100m after going on an acquisition spree in the United States and Asia at the peak of the market. Since then a slump in demand for advertising has crippled the business, leaving it unable to finance debt payments. Photobition was worth about £275m in the middle of last year. Its market value was £2.6m when its shares were suspended at 2.75p on Monday.
Service Graphics' management team will include the Photobition directors Ben Moss, Paul Green and Charlie Reed, supported by the founder directors Peter Reed and Mick Green.Reuse content