Creditors are being offered 47.6p in the pound over four years and will vote on the arrangement, which is being overseen by Begbies Traynor, on 20 September. If they accept, they will effectively write off 369,800.

Spema sales director Tony Franks said the company had struggled to absorb 100,000 of bad debt it took in the last year, including 25,885 for work produced in February for Aspire Print & Repro.

It has been the accumulative effect of debt, as well as the reduced level of work in the industry. This [the CVA] was the only way to deal with the situation. We certainly did not want to set up Spema Two and knock everybody, said Franks.

The 2.6m-turnover company has made three redundancies to decrease overheads, leaving 27 full-time workers and 60 out-workers, who perform hand finishing. The firm also cut its overtime rate from double-time to time-and-a-half.

Franks added: Our suppliers have been really supportive and were committed to paying them back. We are a good family-run company that has been in operation for 55 years and weve got a good client base.