Klöckner Pentaplast files for bankruptcy

Klöckner Pentaplast, a global rigid and flexible packaging and specialty film company, is entering into a Restructuring Support Agreement (RSA) with a significant majority of its financial partners on the terms of a comprehensive financial restructuring plan. The restructuring plan will reduce Klöckner Pentaplast's funded debt by approximately 1.3 billion EUR (1.51 billion USD). Under the terms of the RSA, following the consummation of the restructuring plan, ownership of KP will transition to certain financial partners.

To implement the restructuring plan under the RSA, KP and some of its subsidiaries and affiliates have voluntarily initiated a prepackaged Chapter 11 process in the United States Bankruptcy Court for the Southern District of Texas. Chapter 11 is a US legal process that enables companies to raise capital, restructure finances and adjust ownership and business structures while continuing to operate normally. KP intends to complete the financial restructuring process as quickly and efficiently as possible while continuing to operate in the ordinary course with no interruption to ongoing operations.

'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,' said Roberto Villaquiran, CEO of KP. 'Our operations worldwide are continuing without interruption, and the support of our financial partners demonstrates their confidence in our business and the opportunities ahead. We thank our customers, suppliers and business partners for their ongoing partnership and support, and our employees for their continued hard work and dedication. We are confident that we will emerge from this process better positioned than ever and look forward to further growing our leading portfolio, driving cutting-edge innovation, and bolstering the integral role we play in the customer value chain.'

In connection with the US Chapter 11 process, KP has received commitments for 215 million EUR (250 million USD) in new debtor-in-possession financing from certain financial partners. Upon court approval, this financing, together with cash generated from ongoing operations, will support the business and enable the KP to satisfy its obligations during the restructuring process.

Under the terms of the RSA, KP fully expects to pay vendors, suppliers and business partners in full for goods received and services provided before and after the filing. KP has filed a number of customary ‘first-day’ motions with the court, seeking to maintain uninterrupted operations and uphold its current and future commitments to employees, vendors, suppliers, customers and other stakeholders.

KP’s entities in the following countries are not included in the US Chapter 11 process: Argentina, Belarus, Brazil, Canada, China, Czech Republic, Egypt, India, Italy, Jersey, Mexico, Poland, Portugal, Russia, Switzerland, Thailand, Turkey and UAE. Additionally, certain KP entities in Germany, Luxembourg, Netherlands, Spain, the UK and the US are not included in this process.