Klöckner Pentaplast (kp), a German producer of rigid and flexible packaging and specialty films, has entered a Restructuring Support Agreement (RSA) with a majority of its financial shareholders to implement a broad financial restructuring plan.
The plan is expected to trim approximately €1.3bn ($1.49bn) from the company’s funded debt, with the objective of reinforcing its balance sheet and increasing financial flexibility.
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Following the completion of the plan, ownership of the company will shift to certain financial partners.
To implement the restructuring, kp and selected subsidiaries and affiliates have voluntarily commenced a prepackaged Chapter 11 process in the US Bankruptcy Court for the Southern District of Texas.
The company stated it intends to complete the proceedings “as quickly and efficiently as possible” while maintaining normal operations.
As part of the filing, KP secured commitments from select financial partners for €215m in new debtor-in-possession (DIP) financing.
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By GlobalDataSubject to court approval, this funding, together with operating cash flow, is intended to support the business and meet obligations throughout the restructuring.
Under the agreement, kp plans to pay vendors, suppliers, and business partners in full for goods and services delivered both before and after the filing.
The company has lodged several customary “first-day” motions to keep operations running without disruption and to maintain its obligations to employees, customers, and other stakeholders.
Entities in Argentina, Belarus, Brazil, Canada, China, Czech Republic, Egypt, India, Italy, Jersey, Mexico, Poland, Portugal, Russia, Switzerland, Thailand, Turkey and the United Arab Emirates, are not part of the US Chapter 11 process.
Certain entities in Germany, Luxembourg, the Netherlands, Spain, the UK and the US are also excluded.
Kirkland & Ellis is the legal counsel, PJT Partners the investment banker, and Alvarez & Marsal is the restructuring advisor to kp.
Joele Frank, Wilkinson Brimmer Katcher is the strategic communications advisor.
kp CEO Roberto Villaquiran said: “The steps we are taking today will provide kp with new owners and a stronger financial foundation to continue driving innovation, delivering sustainable packaging and films, and responding to the needs of our customers with agility and excellence.
“Our operations worldwide are continuing without interruption, and the support of our financial partners demonstrates their confidence in our business and the opportunities ahead.”
Klöckner Pentaplast supplies rigid and flexible packaging and specialty film solutions to the pharmaceutical, medical device, food, beverage and card sectors.
