Bloomberg News

Blackstone Said to Risk Losing Klockner in Debt Restructuring

March 12, 2012

Blackstone Group LP (BX) may lose control of Klockner Pentaplast Group if it can’t agree on a debt restructuring for the German plastic films producer by March 21, according to two people with knowledge of the situation.

Lazard & Co. will serve as adviser on the sale of the company bought by New York-based Blackstone in 2007, said the people, who declined to be identified because the talks are private.

Senior lenders led by Oaktree Capital Management LP, Bank of Ireland and GE Capital have proposed to take 100 percent of Klockner Pentaplast through a debt-for-equity swap that will reduce the company’s debt to less than 500 million euros ($656 million) from about 1.2 billion euros, said the people.

Blackstone’s private-equity unit has agreed to buy back some of the equity stake in Klockner Pentaplast from Los Angeles-based Oaktree if the lender-led restructuring proposal goes through, said the people.

Klockner Pentaplast, founded in 1965 in Montabaur, Germany, breached covenant at the end of last year, the people said. Lenders agreed to a waiver on Klockner Pentaplast’s debt covenant until the end of June, the people said.

Helen Winning, a spokeswoman for Blackstone in London, declined to comment. Oaktree didn’t replied to an e-mail seeking comment. Anne Mathews, a spokeswoman for Bank of Ireland, and Michael Goodbody, a GE Capital spokesman in London, declined to comment.

To contact the reporter on this story: Patricia Kuo in London at pkuo2@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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