KLÖCKNER PENTAPLAST
Standard & Poor's downgrades film manufacturer's rating / Heading towards a financial realignment?
On 23 November 2011, Standard & Poor’s (S&P, New York City / USA; www.standardandpoors.com) donwgraded the rating of Klöckner Pentaplast (kp, Montabaur / Germany; www.kpfilms.com) – specifically of kp’s financial holding Kleopatra Lux 1 S.a.r.l. (Luxembourg) – from “CCC+” to “CCC-“, just three ratings away from defaulting. At the same time, S&P changed its forecast for the leading producer of rigid PVC and PET film to “negative”. At the beginning of September, the agency had already lowered the ratings of the company – part of US investment group Blackstone – from “B-“ to “CCC+”.
S&P justified the move by pointing towards the higher risk potential of kp breaching its financial covenants “in the near term”. The analysts classified the group’s 2011 operative results (30.09.) as weaker than expected, adding that given kp’s high debt level, this raised significant concerns about the group’s financial structure.
In response to a Plasteurope.com query, however, Klöckner Pentaplast said business was stable. “Both sales and operative profits have risen by more than 5% year-on-year amid challenging economic conditions,” the Montabaur-based group said, adding that it would continue offering customers “best-in-class film solutions” for products, service and technology. A spokesperson added that based on its innovative solutions, kp was confident that business would continue to grow, not least because the company boasts “a very good liquidity as well as a solid operative performance” and is well positioned in key international markets.
Nevertheless, kp also said that “the majority shareholders are currently contemplating a financial realignment and mulling the different options of a financial reorientation.” However, kp also said that such considerations were completely unrelated to its stable operative results and would thus not affect day-to-day business. In any case, where required, operative restructuring cannot be dismissed entirely, as kp explained: “Of course we continue to identify possibilities to lower our cost structure and to improve.”
Klöckner Pentaplast also said a possible financial reorientation could afford it the chance of strengthening its financial footing “during these harsh economic times”. Expectations are that such a realignment will better position the group to overcome any impending obstacles.
S&P justified the move by pointing towards the higher risk potential of kp breaching its financial covenants “in the near term”. The analysts classified the group’s 2011 operative results (30.09.) as weaker than expected, adding that given kp’s high debt level, this raised significant concerns about the group’s financial structure.
In response to a Plasteurope.com query, however, Klöckner Pentaplast said business was stable. “Both sales and operative profits have risen by more than 5% year-on-year amid challenging economic conditions,” the Montabaur-based group said, adding that it would continue offering customers “best-in-class film solutions” for products, service and technology. A spokesperson added that based on its innovative solutions, kp was confident that business would continue to grow, not least because the company boasts “a very good liquidity as well as a solid operative performance” and is well positioned in key international markets.
Nevertheless, kp also said that “the majority shareholders are currently contemplating a financial realignment and mulling the different options of a financial reorientation.” However, kp also said that such considerations were completely unrelated to its stable operative results and would thus not affect day-to-day business. In any case, where required, operative restructuring cannot be dismissed entirely, as kp explained: “Of course we continue to identify possibilities to lower our cost structure and to improve.”
Klöckner Pentaplast also said a possible financial reorientation could afford it the chance of strengthening its financial footing “during these harsh economic times”. Expectations are that such a realignment will better position the group to overcome any impending obstacles.
01.12.2011 Plasteurope.com [220981-0]
Published on 01.12.2011