PARIS -- Plastic car parts maker Novares went into temporary receivership at the end of April, one of the first big French firms to seek protection from creditors due to the coronavirus crisis, despite government bailout schemes and loan guarantees.
Novares, whose sales have collapsed as a result of the coronavirus pandemic, said on Monday it had taken the step after struggling to find a rapid agreement with its banks and shareholders and solve a coronavirus-related cash crunch.
"Between the talks with our banks and our shareholders, set to last until July, and our customers who are talking about a restart in May, it was hard to see a way out and that is how the judicial solution appeared," Novares CEO Pierre Boulet told Reuters.
Novares said it will be placed under receivership for 34 days under a procedure overseen by a court, and said it hoped that talks about a solution could be completed by May 28.
Without an agreement on a plan for continuing its activities, judges will examine buyout offers for Novares around mid-May. It has six proposals so far, mostly from funds but also industrial companies, Boulet said.
With almost all its 45 plants worldwide shut, Novares is burning through 4 million euros a day and needs some 115 million euros in order to restart its activities at the end of May.
A group of around 12 French and foreign banks have asked for Novares' two main shareholders, fund Equistone with 72 percent and French state holding company Bpifrance with 15 percent, to contribute to a turnaround plan with capital injections.
Novares had net debt at the end of 2018 of around 260 million euros.
Created in Monaco 72 years ago, Novares nearly went bankrupt in 2009, when it was saved by a state-led fund for automotive suppliers FMEA, which has since been integrated into Bpifrance.
Novares, which has 12,000 staff, found new growth by focusing on light plastic components to reduce the weight of electric and hybrid vehicles. Its parts are used in more than 400 vehicle models, inside the engine and on dashboards.
Its revenue doubled in eight years and stood at 1.5 billion euros ($1.62 billion) in 2019, when it booked record earnings.
Boulet hopes that by June Novares can restart most of its European production, which accounts for about 46 percent of revenue.
This week, up to seven European sites should restart, thanks to an advance by shareholders, while five Chinese plants have already restarted.