French munitions maker Fonderie de Bretagne enters receivership, says owner 

PARIS, July 3 - A former French car parts foundry that received public funds to start production of shell casings has entered receivership, owner Europlasma said on Friday, underlining the challenges facing France's efforts to bolster its defence industry.

• The foundry, Fonderie de Bretagne, had suspended production after a fire broke out in the factory in January, less than a year after French group Europlasma took over the site.

• Europlasma had planned to produce as many as 250,000 shells by the end of 2025 in the plant, and received a €7 million ($8 million) loan from public funds for the transformation.

• The group's plan was fuelling hopes for France's ability to quickly rebuild defence industry capacity, in particular for ammunition, as Europe races to rearm in response to Russia's 2022 invasion of Ukraine and to U.S. threats to withdraw funding and forces from the continent.

• Europlasma said in April that it had entered into exclusive negotiations with a French investor to sell its defence business, composed of Fonderie de Bretagne, as well as shell maker Forge de Tarbes, which supplies Franco-German tank maker KNDS for its Caesar howitzer. It said the business would fetch around €150 million.

• The initial negotiation phase was scheduled to end in May, but then was extended by one month until June 25, when the group said discussions with stakeholders were still "ongoing".($1 = 0.8743 euros)

(Reporting by Florence Loève; Editing by Aidan Lewis)