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Mölndal, Sweden, 2009/03/05 - The Board of Directors of Plastal Holding AB, a supplier of plastic components to the automotive industry, today decided to file for bankruptcy at the Mölndal district court, Sweden.
The company has suffered a severe liquidity crisis due to the sharp downturn in the automotive industry and the distressed financial markets.
- This is a very difficult and sad day for all of us at the Plastal group. We have turned over every possible stone in our attempt to avoid this situation, but today our last efforts failed. The parent company is insolvent and must therefore file for bankruptcy, says Roar Isaksen, President and CEO of Plastal Holding AB.
Roar continues: The Plastal group is an integrated group of companies and I believe that it is unavoidable that other legal entities within the Plastal group will have to file for bankruptcy in their jurisdiction. This is a decision that the Board of Directors in each country will have to make.
In the prevailing situation:
• A bankruptcy trustee will be appointed for each Plastal group company that files for bankruptcy – the trustees will notify each business operation of relevant developments;
• For Swedish Plastal group companies, all deliveries into the plants will be suspended. However, deliveries to customers may continue provided that the customers assume the cost of the freight;
• Plastal employees will be notified of the details concerning their specific local conditions.
The Plastal group has been severely impacted by the crisis in the automotive industry. In its role as a supplier, Plastal is directly affected by reductions in its customers’ production volumes. Plastal and its suppliers have also been negatively affected by the malfunctioning credit market, which has made it impossible to finance customer debt. The deteriorating market conditions have affected suppliers all over Europe.
A substantial capital infusion by the main owner, Nordic Capital Fund V, was made in January. Since then, key markets have declined dramatically and projected market volumes for the first two months 2009 are 40% lower than volumes for the first two months 2008.
Plastal’s management and Board of Directors have exhausted all possible options to avoid bankruptcy. A comprehensive internal cost savings programme has been implemented, and management has engaged in close dialogue with customers and suppliers in attempts to identify common solutions. Management has also attempted to divest non-core operations and sought emergency loans from the Swedish Government. Due to the deteriorating market conditions and time constraints, the combined efforts of these measures have been insufficient.
- This is of course a very difficult situation for all of us within the Plastal group. Furthermore, our company is a key supplier to the European automotive industry and this will also create large problems for our customers and suppliers. However, I am hopeful that the bankruptcy process will lead to future solutions for our businesses, valued customers and excellent employees, says Roar Isaksen.
- The drop in demand has been both unexpectedly sudden and large towards the end of last year and continued in the beginning of this year. The consequences have been more severe than anyone could have predicted. The current market conditions continue to be extremely uncertain and it has therefore not been possible to find a sufficient long term solution for Plastal, says Curt Germundsson, Chairman of the Board of Plastal Holding AB.
About the Plastal group
Plastal (plastal.com) is a supplier of engineered plastics to the automotive industry. Plastal has strong market positions in the premium segment of the car market and the light and heavy truck markets. Plastal manufacture and surface-treat interior and exterior plastic components, assuming responsibility for both system and function. The main product area is bumper systems, which the company develops, manufacture and deliver in sequence to many of the world’s most demanding vehicle manufacturers.
Plastal had sales of about EUR 1,300 million in 2008. The group has over 6,000 employees, of which 500 are based in Sweden, at 30 production facilities and four engineering centres in ten countries across Europe and in China.
Curt Germundsson, Chairman of the Board of Plastal Holding AB and Roar Isaksen, CEO of Plastal Holding AB will be available for media comments today in Gothenburg, Sweden. Please contact Plastal communications at +46 (0) 31 7617320 for more information.
For more information, please contact:
Tunde Oyedeji, Director Communications, Plastal +46 (0) 766 35 01 01.