PrettlNoma partner restructuring
By By MIKE VOSS, Contributing Editor
GenTek, a 50-percent owner of PrettlNoma Systems, is restructuring after filing a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code on Oct. 11, 2002.
Last month, Beaufort County and Washington officials announced PrettlNoma Systems would move its North American headquarters into the former Lowe's building on West 15th Street in Washington. The company will supply parts to appliance-maker BSH, located in New Bern. Hiring could begin in March; the doors could open July 1, said Tom Thompson, Beaufort County's economic developer, last month.
Thompson said GenTek's bankruptcy filing is a "non-issue" when it comes to affecting PrettlNoma Systems' plans to locate to Beaufort County.
"We looked into that before we gave them any grants," Thompson said in a brief telephone interview Thursday.
"The (PrettlNoma Systems) North America plans are not at all affected by the Chapter 11 filing," said Richard Wool, spokesman for Strick and Co., media representatives for GenTek, on Thursday.
Washington Mayor L. Stewart Rumley, in a telephone interview Thursday, was not aware GenTek had filed Chapter 11 papers.
"The city should have been made aware of that prior to signing on the dotted line," Rumley said. "We need to be careful with the taxpayers' money."
Rumley said information about GenTek's Chapter 11 filing should have been made available to the city and county, so they could have taken it into consideration while deciding whether to provide incentives to attract PrettlNoma to the area. The city approved the incentives earlier this year.
The other 50-percent owner of PrettlNoma System is Prettl, a manufacturer of automotive, appliance, medical and consumer-oriented products and equipment.
Most of GenTek's subsidiaries and its Noma Co. Canadian subsidiary also filed voluntary bankruptcy petitions. The company's non-U.S. subsidiaries and affiliates other than Noma Company Canada are not included in the filing. GenTek is a technology-driven manufacturer of telecommunications and other industrial products.
"GenTek is not going out of business. During the restructuring period and beyond, GenTek's operations will continue without interruption. We will maintain our commitment to providing quality products and superior service to our customers," reads a letter signed by Richard Russell, GenTek president and chief executive officer.
The letter is posted on the GenTek restructuring information Web site.
"This past year has been particularly challenging for companies who have invested heavily in the telecom industry, and GenTek has not been immune. We have taken this step to gain time to resolve debt and balance sheet issues created, to a large extent, by the severe and unforeseen downturn in worldwide telecom spending, which left us with a dramatically reduced revenue base and the debt associated with our historically larger revenues and earnings," Russell wrote in the letter.
GenTek, with headquarters in Parsippany, N.J., and the Prettl Group announced the formation of PrettlNoma Systems, a joint venture, in December 2002.
According to a GenTek press release concerning the bankruptcy filing, "The company believes that its available cash of approximately $110 million and continued cash flow from operations should be adequate to fund ongoing operations and meet all anticipated obligations to customers, vendors and employees during the Chapter 11 process, and that it will therefore have no foreseeable need for debtor-in-possession financing."
The case, 02-12986 (MFW), was filed in the U.S. Bankruptcy Court for the District of Delaware and assigned to Judge Mary F. Walrath. The claims bar date, by which creditors must file proof of claims, is 4 p.m. April 14, 2003.
PrettlNoma is planning to lease the former Lowe's building from the Beaufort County Committee of 100, a private, nonprofit group working with the publicly funded Beaufort County Economic Development Commission. The company may retain an option to buy the building, EDC officials have said.
PrettlNoma's headquarters is at Neuruppin, Germany. The company's Web site estimates sales of $120 million for 2003. Reported sales reached $87 million in 2001. PrettlNoma makes panel systems and wire harnesses for appliances.
The company employs 885 people worldwide.
Beaufort County and Washington are providing industrial incentive grants to PrettlNoma. The grants, basically, are equal to county and city property taxes PrettlNoma will pay during a seven-year period beginning this year.
If PrettlNoma does not meet certain criteria, all grant funds must be returned to the county, and the grant offer terminates.