The company made its 50-strong workforce redundant over the weekend after it was unable to recover from a "30% drop in turnover", its former finance director David Fillery said yesterday.

It is now in administration with RSM Bentley Jennison. However, a deal to sell the company to Full Spectrum Print Media, led by former works manager Lee Hammond and Heronsgate salesman Kevin Walker is in the process of being finalised.

Hammond said that the two were "putting their money where their mouths are" and the new business would take on 26 of the staff.

He confirmed that no directors of the former company are involved in the bid, not would they be employed by the new company. "This is not a phoenix," he stressed.

He acknowledged that gaining supplier support would be a challenge but said that he maintained a good relationship with many suppliers.

The collapse of the Basildon-based company came just five months after it had a Company Voluntary Agreement (CVA) accepted by creditors that would have paid out 38.54p in the pound over the next five years.

Fillery said: "We tried to do the best we could by the creditors with the CVA but the economy took a massive nosedive in January and February, which took us by surprise.

"Without the option of credit following the CVA, we were left with little breathing room and were running out of money."

Fillery added that all staff have been paid up to the date of their redundancy – a matter which was "of primary concern for the directors".

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

See also:
Heronsgate proposes CVA to save itself from closure
Heronsgate CVA bid approved by creditors