A meeting of the printer's creditors will take place on Thursday 18 September, where creditors will vote on the Company Voluntary Arrangement (CVA) that Heronsgate has proposed.

A CVA is an arrangement between a company and its creditors to restructure its debts, so that, if accepted by creditors, installment payments, usually at a reduced level, can be made.

PrintWeek has obtained a copy of the CVA proposal. Heronsgate, which is represented by chartered accountants RSM Bentley Jennison, is offering creditors at least 38.54p in the pound over the next five years, with further payments to be paid based on the company's profit.

In total, the company owes £783,661. Included in the debt are several paper companies facing debts of almost £150,000. Trade printers, trade finishers and mailing houses are also owed in the region of £200,000. Other creditors include Basildon Council, which is down £86,000.

In the report to creditors it states that Heronsgate's directors were left with two choices – a CVA or a terminal form of insolvency such as administration or liquidation.

David Mills, one of the company's directors, told PrintWeek that the company could not comment on the situation until after the meeting. However, he did say that Heronsgate had been working on the CVA since April.

According to the company, losing £3m of business in a year between 2001 and 2002, the onset of print management and a bad debt incurred at the beginning of the year are some of the key reasons for Heronsgate's financial difficulties.

The company has also undertaken a number of cost-cutting tasks in order to improve efficiency, including reducing staff numbers from 68 to 51, which it said will save it £38,000 per month.

Heronsgate was founded in 1992. In 2007 it recorded a turnover of £7.2m, down from £8.3m the previous year.