Focus Press is down to two potential buyers as its dire situation has not gotten any better over the weekend, with major developments expected by close of business today.

The company is in deep trouble, just months after opening a new $8m plant in Canberra and a new $12m printing facility Wollongong, partially funded by a $6.1m government grant, apparently facing an exodus of suppliers and clients, and shopping itself to potential buyers.

Focus Press group general manager Lee Barnsley told ProPrint on Friday the aim was to sell the company in the next five days, that talks with three unidentified parties were ongoing, and that industry identity Bob McMillan was acting as a senior advisor to one of them.

Sources within the company say one party has pulled out because managing director David Fuller wanted to keep some of the senior management team in place and the potential buyer wanted to clean the house.

However, a sale or other resolution could be imminent, with Barnsley saying while he did not know the progress of sale discussions, an announcement of some kind was expected before close of business today (Monday).

 [Related: Friday’s Focus Press newsflash]

The sources say if a sale is going to happen it has to be soon, as without paper and other vital supplies coming in, the company will struggle to make it through the week.

They say some small jobs were completed on Friday with leftover stock but most staff are now standing around with no stock to run outstanding jobs. Staff morale is at rock bottom and plants have been locked down to prevent suppliers from removing what little stock is left.

The cover for Bauer Media’s Elle magazine, which Focus was supposed to print on Friday for PMP, will not be done, and the print giant will now go elsewhere for its cover printing needs.

Company sources say there has been little communication from management other than pay slips arriving this morning – two days earlier than usual – leading to speculation Focus is wrapping everything up for a sale or administration.

They say any sale would almost certainly result in the closure of Matraville, and Wollongong would likely go too if it wasn’t complicated by the $6.1m grant that was used to build it.

The Wollongong plant, which was opened only months ago, has apparently become somewhat of an albatross as the conditions of the grant mean workers have to be sourced from the local area – leading to poorly trained workers producing lower quality work that struggled to meet deadline.

Company sources are convinced any buyer would bring in new management, if only to hold onto clients. “If clients hear the same people are running the ship there is no way they will come back,” one says.

Estimators, accounts, and other administrative staff were told not to come into work on Friday, either taking annual or unpaid leave.

[Related: More companies in distress]

Company sources say at least nine suppliers including all three major paper merchants have withdrawn credit and have refused to supply Focus due to unpaid bills, with KW Doggett ceasing deals five months ago.

Barnsley says Focus is involved in a dispute about paper quality with Doggett and believes the company is otherwise up to date with those bills.

KW Doggett managing director Simon Doggett would only say his company has a small exposure and is watching the situation with interest.

Barnsley also confirmed BJ Ball pulled the plug on Thursday and that Spicers removed consignment stock from the company’s Matraville and Canberra facilities Friday morning, but says while both companies are no longer dealing with Focus they have not ruled out returning.

Company sources say Spicers’ actions were due to Focus not paying the major portion of a $2.3m debt Spicers had requested. Spicers NSW sales manager Ian Winters offered a ‘no comment’ to ProPrint.

As Focus is a $40m company, it will be spending as much as $12m a year on paper, and as paper merchants can invoice with 90-day deadlines the paper bills could be up to six months overdue.

Sources close to Focus’ suppliers say numerous other trade suppliers are owed big sums including Graphic Book Binding which is owed $80,000, Graphic Trade Services at $47,000, Graphic Plus, and TLC which are thought to be owed more than $200,000 between them.

Focus has huge press power within the one group; it has three long perfectors, a 12 colour in Wollongong, and ten colours in Strathfield and Matraville, as well as several other B1 presses. That had rival printers wondering how they filled the presses.

[Related: More merger and acquisition news]

Sources close to the company say Focus has shed at least 12 jobs in recent months and has called numerous other staff in to explain why they should keep their jobs, and what they bring to the company, as it seeks to have staff multitask to save money.

Barnsley denies there have been significant cutbacks but says some sales representatives have been fired for poor performance and some staff were juggled between Wollongong and Canberra.

He says rationalisation has been discussed but no plans have been drawn up.

The trouble began six months ago when Focus discounted its prices too much because it was consistently being undercut in the industry’s ongoing price wars and was not making much money on jobs. It then decided to up its prices and sell on quality so it could turn a profit.

Barnsley says: “We did lose some clients that were price-focused, but we want to be seen as a quality printer.”

He says the company decided to stop dealing with clients who were ‘treating us like a bank’ and dropped 25 clients that had a habit of not paying within 120 days.

He says Focus is currently writing cheques to some suppliers that want to get out during the present situation, but that several clients have called today to express their support.

Company sources say there have been big holes in Focus’ job board for about a month and that there was not enough work to go around the company’s four sites.

Barnsley says the market has been flat for everyone in recent times so the plants are not running at full capacity, but that work is continuing with a ‘skeleton staff’.

Focus Press won a reputation as an environmental champion, and was the envy of the industry when it established a brand new security printing business in Wollongong earlier this year with the aid of a $6.1m government grant. This came only four months after Focus opened its new $8m Canberra print facility.

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