A confirmation statement issued to Companies House last Friday (29 March) stated that Adam Stephens and Henry Shinners of Smith & Williamson had been appointed as joint supervisors for the CVA of the Bermondsey, south London-based commercial print outfit.

With total liabilities equal to £4.2m, the arrangement covers Fontain creditors collectively owed just over £1m, who will receive an anticipated dividend of 82p in the pound.

Creditors voted on 21 February to approve the CVA, with 75% by value (£781,970.46) in favour. HMRC, which is owed £251,911 (25%), was the only party to vote against the arrangement.

According to an informed source, HMRC is known to go through “phases” of either supporting or opposing CVAs “as a matter of principle”. Usually, it has enough voting power to sway the decision. Fontain is an exception in this instance.

Fontain will make monthly payments, with the first payment understood to have been paid on 15 March.

PrintWeek’s source said: “The bottom line is that creditors have been given a choice to either get something in the pound back or to get nothing and they have decided that this is the best way to go.

“As a rule of thumb, CVAs do not tend to succeed in the print sector because there is not enough headroom in the margins. There has to be a management reshuffle or a reduction in costs as the business has to survive, and to do so it must pay its suppliers.

“Clearly, Fontain believes it can work its way through this CVA with the support of its creditors and they will not shoot it down. It will hope to move forward and satisfy the creditors.”

Smith & Williamson declined to comment and Fontain management did not respond to a request for comment from PrintWeek by the time of publication.