The group, headquartered in Derby but with operations in Milton Keynes, Wigan and Leicester, got into trouble after its gravure business suffered a 2.7m collapse in sales due to client closures, including Crest Packaging and Teich Flexibles.

Tecno underwent an MBO 16 months ago and bought Wigans Tronic Gravure at the same time.

They bought additional capacity at a time when volumes were declining and they hadnt taken action to reduce overheads. The MBO was also financed with debt, explained consultant Paddy Campbell, who was brought in by Tecnos bankers to help rescue the company and is now its non-executive chairman.

Cross guarantees within the group meant fellow subsidiaries TecnoLink (origination and digital asset management) and TecnoLabel (wet glue labels) were also affected.

The group, which had sales of 11.7m in its last-filed accounts to March 2002, went into receivership on 16 December. A new holding company, Image Management Technologies Group, was formed the same day and acquired all the assets.

Campbell, a former divisional finance director of BPC Labels, emphasised that it was not a phoenix situation: I have spent a lot of time turning around businesses in this industry and there wasnt another solution. I dont have any truck with phoenixes and its definitely not the case here. This is very much a bank-driven restructure. The most important message for customers and suppliers is that the bank is now the majority shareholder. The biggest amount of debt has been written off by the bank and the crown.

My aim was to save as many jobs as possible, and I believe this is a better solution for creditors than if the business had just been allowed to collapse. If the gravure engraving business had gone it would have taken the second largest player out of the market and that would have had significant repercussions, he added.

Managing director John Courtman has left the company and finance director Wincent Kordula is also set to leave. Long-standing sales director David Ettie remains with the business, and Campbell is looking to recruit a new managing director for the gravure side.

Around 25 staff have also left, mostly from the gravure operations, leaving the company with 156 employees going forward.

Story by Jo Francis