In addition, Arelec Araymond (13 employees), headed by Thomas Donjon and whose business is 90% dependent on Arelec’s, has been placed in receivership by the Pau Commercial Court for a period of six months.
After being part of the British holding companies until 2004, Arelec became independent again and has been headed since 2006 by Nicholas Dungon who bought the company with an investment fund and set an ambitious growth strategy. Specializing in the production of magnetic components and modules for the automotive, aviation, furniture and advertising sectors, Arelec saw its sales increase from 10 to 20 million euros in a few years after overcoming the auto industry crisis in 2008.
Weighed by Covid
But in 2016, financial difficulties surpassed Arelec (which employs 85 employees in Tunisia). Lonsoise has been placed in receivership. In 2018, the Boe Commercial Court approved a continuation plan. But Arelec was affected in 2020 by the crisis related to the Corona virus. Half of the employees are placed in partial activity. The court approves a new 10-year recovery plan aimed at settling obligations over €10 million.
But cash flow difficulties remain, and the international situation does not favor the company’s activity (reliance on China, prices for raw materials). Nicholas Dunjon also mentions “the catastrophic increase in transportation costs and delays between last summer and spring”. “There was also a deterioration in the euro,” he adds. “Ironically, we have a ranking book that may not have been this high before,” he explains. But we will need more raw materials to meet them, and even more working capital to meet deadlines.” “All of this has put us in a very precarious position,” summarizes Nicolas Dungon.
As of July 5, the company’s commitments still amount to more than 10 million euros. Only 30% of salaries can be paid in July. The judicial liquidation of AGS, the wage guarantee system, will allow the remaining 70% to be paid in the coming days.
There was no comment this Thursday from employee representatives, with the latter confining themselves to pointing fingers at the “management department”.
On the latter’s side, CEO Nicholas Dunjon stated that he was deeply moved by the situation: “It’s the worst August month of our lives, but we have to face it.” While he remained cautious given the situation, on Thursday he was confident that a recovery could be possible. “We have very interesting markets, especially with car manufacturers.” Moreover, with the avenues of redemption for exploration, as stipulated in the judgment of the Commercial Court. “We’ve already had discussions with potential buyers for two years,” confirms Nicholas Dunjon. So the story may not be completely over.