After filing for Chapter 11 bankruptcy last year, Klöckner Pentaplast has completed its financial restructuring – reportedly eliminating around €1.3 billion of funded debt.
As it emerges from the US Chapter 11 process, the company has executed a transition of ownership to a group of its financial partners, led by funds affiliated with Redwood Capital Management.
Klöckner CEO Roberto Villaquiran and Redwood Capital management partner Michael Kaufman have been appointed to the new Board of Directors. Berlin Packaging’s CEO and chairman, Andrew Berlin, expected to be appointed as chairman of the Board in the near future.
The rest of the Board’s members are set to be finalized in the coming weeks.
Klöckner has also received an additional €349 million in new capital to support its operations further. The company hopes that its ‘strengthened’ financial position will help its packaging and film solutions meet consumer expectations and support the transition into a more circular economy.
“Today represents the next exciting phase in kp’s journey, as we emerge from this process as a financially stronger company,” says Roberto Villaquiran. “I am energized by the opportunities ahead, and I am highly confident that our talented teams will continue to build on our leading product portfolio and global presence.
“We are grateful for the support of our new owners, who continue to demonstrate their confidence in our business and future prospects as we deliver innovative and sustainable packaging and film solutions to customers globally.
“I am proud of our dedicated employees for their relentless commitment to providing excellent service for our customers. We also appreciate our global customers, vendors, suppliers, and business partners for their tremendous support, and look forward to working together as we embrace a new chapter of partnership and value creation.”
“We’re very proud to continue supporting kp and partner with kp’s leadership as the Company moves forward and builds on its competitive advantages from a position of strength,” add Sean Sauler and Ruben Kliksberg, co-chief investment officers at Redwood Capital Management. “kp’s dedication to fostering cutting‑edge innovation and customer service positions the Company for sustained long‑term success.”
The ad hoc group of Klöckner’s first lenders are advised by Gibson, Dunn & Crutcher as counsel and Houlihan Lokey UK Limited as investment banker. Kirkland & Ellis is serving as Klöckner’s legal counsel, PJT Partners as investment banker, and Alvarez & Marsal as restructuring advisor.
Apparently, Klöckner initially faced increased demand during the COVID-19 pandemic and refinanced its capital structure in early 2021; this left the company with approximately €1.85 billion in first-lien debt maturing in 2026. A spike in energy costs compressed the company’s profit margins, strained liquidity, and prompted another restructuring, while changing payment terms and demand from suppliers for more upfront payments are thought to have inflated Klöckner’s working capital outflow.
In other news, DOMO Chemicals is one of multiple DOMO Group subsidiaries to file for insolvency – an outcome attributed to high energy prices, low demand, and ongoing imports from non-EU countries.
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