French-based automotive component supplier Novares Group exited pre-receivership legal proceedings following an 146 million euro ($161 million) investment by its existing shareholders and financing from "a pool of banks."
The commercial court of Nanterre, France, approved the deal May 28, according to a Novares news release. The company had filed for receivership, which is similar to U.S. Chapter 11 protection, on April 29.
The deal includes 71 million euros ($79 million) in the form of a loan from banks under the French PGE State Guarantee Scheme, 45 million euros ($50 million) in loans and 30 million euros ($33 million) in equity from Novares' shareholders Equistone Partners Europe and Bpifrance, according to the release.
"Novares' total debt has been significantly reduced and converted into equity," the release said."The deal secures the future of Novares, allowing it to continue to serve its customers and reopen sites globally … mainly in the U.S., which were closed as a result of the COVID-19 pandemic, as and when, conditions allow."
The company reopened 13 of its 19 European production sites May 18 following a liquidity injection by shareholders Equiston and BPI of 45 million euros ($49 million).
"We are pleased to have found a deal that gets us over this short-term liquidity hurdle," Pierre Boulet, CEO of Novares said in the release. "Novares was a solidly-performing company when the pandemic hit, and will continue to be so. … Our customers rely on our products and expertise, and we are committed to ramping up production to deliver in line with their expectations."
The company filed for bankruptcy protections "as a result of the COVID-19 pandemic, which led to the shutdown of its operations globally for an extended time period and resulted in significant cash-flow shortage," the release said.
Novares, based in Clamart, France, is a major global injection molder, with 12,000 employees and operations in 22 countries.
Its North American holdings include the former Key Plastics LLC and Miniature Precision Components Inc. businesses.
In North America alone, the company ranks No. 19 in the most recent Plastics News ranking of injection molders, with an estimated $425 million in sales.