Photobition chief executive Eddie Marchbanks has stepped down and the group has appointed administrative receivers from Arthur Andersen after lenders decided not to provide funds for the company to continue trading.

The companys shares, which were suspended on Monday (29 October) when trading at only 2.75p, were removed from the FTSE after the announcement.

Marchbanks departure will be welcomed by shareholders, who were unhappy about his dominant position and the 748,000 salary, including performance-related bonus of 254,000, that he took last year.

The administrative receivers have not been appointed over any of the groups trading subsidiaries, but are in discussions with them about future plans.

The management of Photobition UK Graphics Division has set up a new holding company, Service Graphics, to allow it to continue trading.

"We now have a stable platform to work from and this gives us the chance to go forward and build the business," said a UK management spokesman.

The new team comprises UK directors Ben Moss,
Paul Green and Charlie Reed, supported by founder directors Peter Reed and Mick Green.

A company source said Service Graphics would probably comprise around 13 businesses, including Photobition Service in Salisbury and Wandsworth, Photobition Jupiter in London and Photobition Event Solutions in Balham.

Prior to the announcement the graphics division totalled 19 UK sites. The news also puts a question mark over the fate of the companys global sites.

"The news has not come as a surprise, but it is alarming to hear of the receivership of a plc," said Litho Supplies joint managing director Gerry Mulvaney. "Corporate governance rules are quite strict, and it seems shareholders interests were not considered."

The company spokesman said all suppliers and customers were being kept informed of developments.

The troubled reprographics group had been in consultation with its bankers and loan note holders to arrange a 50m programme of debt restructuring of its 100m-plus debt.

Former Photobition director and founder Bob Bushby said: "I am only surprised by the fact that the institutions allowed the situation to carry on for so long."

Story by Andy Scott