The refinancing, revealed by PrintWeek last week, includes a rescheduling of the highly leveraged group's debt. This will create the liquidity to fund the balance of its massive 120m "True North" investment and restructuring plan, intended to transform the profitability of the group.

It has also "substantially strengthened" Polestar's balance sheet as 160m in discount loan notes has been converted into equity.

It takes Investcorp's total investment in the 490m turnover company to some 400m.

"The management team and prospects are very good and there is further improvement to come," said Investcorp principal and Polestar non-executive director Tristan de Boysson.

"If we were not absolutely confident that it will work and keep on improving we would not have put in this 74m. We intend to make the return... it's just a longer haul than we initially envisaged."

Group finance director Peter Johnston brushed off jibes about Polestar being "print's Eurotunnel".   "There is a big difference.  If this were purely about meeting debt obligations we would have had a very different response from our bankers and shareholders. This investment programme makes sound financial sense and has involved rigorous due diligence," he said.

The True North project extends beyond the Sheffield greenfield site and will also include additional capacity for existing clients. In addition it is likely to include restructuring of the existing UK gravure sites.

"In order for our existing gravure facilities to remain viable concerns they have to be competitive against continental Europe and at the moment they're not," said Johnston.

Although 2007 has been mooted as a possible exit date for Investcorp, de Boysson said there was "no deadline. We will exit when it makes sense for Polestar".

Story by Jo Francis