French auto supplier Novares Group is continuing to adapt resources to remain in good financial health after it exited a pre-receivership legal proceeding in May, said CEO Pierre Boulet.
Novares was able to exit French bankruptcy protections, similar to U.S. Chapter 11 protection, within 29 days, following a 146 million euro ($161 million) investment by its existing shareholders and financing from a number of banks.
"We ended up with $260 million debt-less and some additional cash from banks, French government, other government and shareholders," Boulet told Plastics News. "All that together is making Novares very healthy.
"Obviously we're going to watch what the COVID impact is going to be," he said. "As long as people will buy cars, because they walk away from public transportation, we believe that the volumes remain resumable."
"If we do not have any surprises" in the fourth quarter of this year, Boulet added, he expects Novares to stay financially healthy through next year as "more than 10 companies" have become "highly interested" in opportunities to invest.
"Early next year, there might be some evolution," he said. "We have to be careful with the near term, but optimistic for the midterm.
"We have decided to continue our innovation plan … and we hope we're going to get some new ideas to integrate in our next prototypes," he said. "Starting early next year, we will continue to revisit our strategy for growth and see what kind of development we can afford."
As Novares began reopening North American plants in May, it was a challenge to ramp back up to full employment levels in the U.S., Boulet said.
"[Workers] got more money staying at home than coming to work, so it was a difficult time to increase our resources in Michigan and Wisconsin," he said.
That workforce lull lasted through August and September, Boulet said, but the company is now close to 100 percent of its U.S. workforce.
Boulet has also repeatedly postponed trips to the U.S. to visit plants and customers due to French requirements for a two-week quarantine by citizens reentering the country from certain regions.
"The U.S. and Mexico is 40 percent of the business," he said, adding that he expects to travel to Mexico soon. It's important, Boulet said, "to see real things in the plant, the flow of the people, how they work."
"I'm traveling to many countries, but the U.S. is still not a destination I can fly to," Boulet said. "A lot is happening in U.S. plants, so I need to go there and see the reality of it, speak with the people, understand their issues, support, and make sure we're going in the direction we decided together."
The company filed for bankruptcy protection on April 29 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, a May 18 release said.
Boulet said Novares exited bankruptcy "at the same time that the economy and industry woke up. … Everything was right on time."
The commercial court of Nanterre, France, approved the deal May 28, which included 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.
"Novares was a solidly performing company when the pandemic hit and will continue to be so," Boulet said in a release at the time.
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.