An international business with local ties has filed for Chapter 11 bankruptcy in an effort to restructure.
Earlier this month, Klöckner Pentaplast (KP) announced it has entered into a Restructuring Support Agreement (RSA) with a majority of its financial partners as part of a comprehensive financial restructuring plan. The plan will reduce the company’s funded debt by €1.3 billion, $1.49 billion dollars. Company officials say doing so will strengthen the company’s balance sheet while also enhancing its financial flexibility in the future. Following the completion of the restructuring plan, ownership of the company will transition to some of the financial partners.
“The steps we are taking 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,” CEO Roberto Villaquiran wrote in the RSA announcement. “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 a website devoted to addressing the restructuring, Klöckner officials assert the bankruptcy filing is not a liquidation or insolvency proceeding, nor does it mean the company is going out of business. Rather it’s a “prepackaged” Chapter 11 filing which means the company has reached an agreement with a group of its financial partners on the terms of a restructuring plan and the filing enables the company to move through the process quicker. Operations will continue as normal.
“We remain focused on what we have done for the past 60 years: delivering sustainable packaging solutions to meet our customers’ needs through teamwork, innovation and excellence,” Villaquiran wrote in a letter to customers. “This process has no impact on our customers or how we work with you.”
Not all of the company’s entities are involved including those in Argentina, Belarus, Brazil, Canada, China, Czech Republic, Egypt, India, Italy, Jersey, Mexico, Poland, Portugal, Russia, Switzerland, Thailand, Turkey and UAE. Certain entities in Germany, Luxembourg, Netherlands, Spain, UK and the USA are also not included. Klöckner Pentaplast of America and KPP Texas, LLC are listed among the filing entities. The Gordonsville locations are a part of the former, along with other Virginia locations in Rural Retreat and Charlottesville, as well as plants in Ohio and West Virginia.
Klöckner was founded in 1965 and currently has 27 plants in 16 countries employing more than 5,000 people serving customers worldwide in more than 60 locations. The company is celebrating its 60th anniversary this year.
