Decoma International Inc. is looking to take over part of insolvent European auto supplier Peguform GmbH with a bid to buy the four plants that make up its French holdings.
The exterior auto parts specialist offered 6 million euros ($6.4 million) for the fascia manufacturing business and fixed assets of Peguform France S.A.S., and as much as 4 million euros ($4.3 million) for its work in progress, raw materials and finished-goods inventory. The company had an estimated 160 million euros ($172.4 million) in sales last year.
The bid is just the first stage of the possible purchase, Decoma Chief Financial Officer S. Randall Smallbone said Feb. 3 by telephone. From that stage, court officials in France will decide how to move forward with the offer.
Interested buyers had to submit bids by Jan. 31 to the French court overseeing Peguform France's insolvency. The price could go up from that point, but will not decrease.
``What happens from here depends on the other bidders and on the court,'' Smallbone said. He did not know how many other companies have filed bids.
The French operations could boost Concord, Ontario-based Decoma's geographic and customer base in Europe. It has six manufacturing sites in Europe.
The Peguform plants have extensive work with French carmakers PSA Peugeot Citroen Group and Renault V.I. Decoma now has little business with those companies, Smallbone said, and what it has is made up of small trim. The Peguform France business would give Decoma bumper fascia business with both companies. That would add to Decoma's sales to its biggest European customers, DaimlerChrysler AG, Ford Motor Co. and Volkswagen AG.
Decoma has no interest in the rest of Peguform at this time, Smallbone said. Those facilities include a mix of interior and exterior plastics auto components and do not fit into Decoma's overall business mix.
A judge declared the German assets of Peguform GmbH of BÃ¶tzingen, Germany, insolvent Oct. 1. The filing affected other Peguform units, leaving most of the operations up for sale.
Peguform's parent company, Venture Holdings Co. LLC of Fraser, Mich., has told its customers, suppliers and creditors it will be able to continue operations at least until April 15. The firm has $1.8 billion in annual sales, with at least a third of its sales from the Peguform operations.