Oaktree Capital Management LP is leading senior lenders seeking to take over plastic films producer Klockner Pentaplast Group in a restructuring that will leave it and owner Blackstone Group LP (BX) with a majority stake in the company, according to two people with knowledge of the matter.
Oaktree, along with the Bank of Ireland and the lending arm of General Electric Co, have proposed to take over the plastic films producer a deal that will reduce the company’s borrowings to less than 500 million euros ($656 million) from about 1.2 billion euros, said the people, who declined to be identified because the talks are private. The transaction will wipe out the claims of all junior creditors owed about 350 million euros, the people said.
Los Angeles-based Oaktree has agreed to sell a portion of its equity stake to Blackstone once the proposal succeeds, which will leave both firms as controlling shareholders, said the people.
Klockner Pentaplast will need to put itself up for sale if an agreement can’t be reached by March 21, the people said. Lazard & Co. will serve as adviser on the sale of the company bought by New York-based Blackstone in 2007, said the people. Richard Creswell, a spokesman for Lazard, declined to comment.
Klockner Pentaplast, founded in 1965 in Montabaur, Germany, breached debt terms 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 reply to an e-mail seeking comment. Anne Mathews, a spokeswoman for Bank of Ireland, and Michael Goodbody, a GE spokesman in London, declined to comment.
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