SWEDEN - Nordic Capital-backed Plastal files for bankruptcy

Rikke
05 March 2009

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Nordic Capital-owned Plastal Holding AB, a supplier of parts to the European automotive industry, has declared insolvency and filed for bankruptcy.

Nordic Capital acquired Plastal in 2005 from Gilde Investment Management in a secondary buyout believed to value the company at EUR 352m. The transaction was supported by a debt package provided by Handelsbanken, which today announced its exposure to the company to be SEK 2.1bn. According to the statement made by the bank, the previously granted acquisition credit has been repaid in full.

The downturn in the automobile industry, which has seen projected market volume in the first two months of 2009 drop by 40% compared to 2008, has severely impacted Plastal. Additionally, the state of the credit markets made it impossible for the company to finance customer receivables.

Efforts to reduce costs, divest non-core entities, and obtain external capital failed to rescue the business, which also received a capital injection from Nordic Capital in January this year and applied for an emergency loan from the Swedish government.

Plastal subsidiaries are expected to file for bankruptcy in accordance with local legislation in their respective countries.

Plastal group reported sales of EUR 1.3bn in 2008. Of its approximately 6,000 employees, 500 were based in Sweden. The group has 30 production facilities and four engineering centres in ten countries across Europe and in China.