Following its pre-pack sale out of administration before Easter, the group has been contacting customers this week asking them to novate their existing contracts to the newly created Polestar UK Print.
Suppliers are also waiting to hear what will happen about their outstanding debts with the £216.4m-turnover group, with some continuing to supply the business but only on pro forma terms.
Polestar chief executive Barry Hibbert said he was confident the group would keep all or most of its customers and suppliers on-board.
Greg Hayes, group managing director for Northern Europe, France and Benelux at the group’s major ink supplier Sun Chemical, said: “We’re working things through with Polestar to find the right way forward.”
Many suppliers to the group are unwilling to speak on-the-record until their own situation is clarified.
“This is a big moral dilemma for us now,” one supplier told PrintWeek. “This is one of the biggest accounts in the country.”
An equipment supplier said: “We’ll continue dealing with them, but we’ve taken a big hit. This causes problems all round. We were paying a massive premium to get credit insurance, but we can’t even insure it now.”
A number of customers also declined to comment, with one publisher saying it was “too early in the process” to say anything.
Richard Hill, production operations director at Time Inc UK, which agreed a sole supplier deal with Polestar in 2014, said: “I’m unable to comment on the detail of any recent changes, other than to say that Polestar remain a trusted supplier to Time Inc UK.”
Rival printers are watching the situation closely. “I think customers are a bit better prepared because of the warning they got in December. They are considering their position in a less knee-jerk way,” said a senior print source. “These decisions will also depend upon the level of difficulty publishers would have in placing their work elsewhere on the market.”
Unite the union national officer Ian Tonks said the group’s Information and Consultation Body of employee representatives met earlier this week, and was addressed by Polestar chief executive Barry Hibbert via video conference.
“He was open and frank with us, and that’s exactly what we need at the moment,” Tonks said. “These are serious times up until the point when we know more. We hope all the customers come back.”
Polestar employs circa 1,500 staff with agency and temporary workers taking the total up to around 2,000. Tonks added: “Their [Polestar’s] choice was to take their workforce with them. They value their highly skilled workforce.”
Following the pre-pack sale of the business on 24 March, administrators at PricewaterhouseCoopers have subsequently clarified that Polestar UK Print has acquired all of the trading businesses and assets of the group. “In terms of liabilities all employees have transferred and as a result we do not envisage that there will be any preferential creditors. There will however be unsecured creditors and the secured creditors will face a significant shortfall on their lending to the group,” a spokeswoman said.
A new company, Polestar Stones-Wheatons, has also been registered at Companies House. It has two directors: Polestar chief financial officer Swagatam Mukerji, and Mats Johansson who is financial director at Polestar’s owner Proventus Capital Partners.
Hibbert said the new company could be required in the future. “It keeps our options open and easier for acquisition, disposals and restructuring in the future should the options be needed.”
PricewaterhouseCooper has written to creditors about the details of the administration. See separate story here.
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