Klöckner Pentaplast - comment

So the restructuring went largely to plan. The FY25 accounts were the last to be prepared with the pre-petition capital structure in place. The reporting entity will change going forward. As noted in November: 

- We had said: "Nobody wanted the equity" — the disclosure that holders received it through a Luxembourg topco (Kleopatra Topco S.A.) and the wide post-emergence shareholder base ("no individual shareholder exercises control or significant influence") confirms the equity got pushed out broadly rather than coalescing around Redwood Capital Management, who are described in the emergence press release as "leading" the financial-partner group, but the FY25 disclosure on ownership says no single holder has control — i.e. Redwood is the largest, but not a sponsor.

- We had also said: "New money sits neither Super Senior, nor overly attractive". The Exit Facility is now one single €1.1bn senior secured tranche, containing the DIP financing, the €17.5m 2L recovery and the new money all pari passu. The Exit Facility's economics (Euribor/SOFR + 7.0% with partial PIK in year 1, dropping to +6.0% cash-pay) match our "5% PIK on top of regular interest, while in the process, thereafter pays the same and ranks equally." 

- "1L total recovery of approx. 65c/€" — the FY25 disclosure (Section E.3) ties together that the 1L took the Exit Facility AND 100% of equity. So on the ~€1.9bn 1L claim against €1.04bn of senior paper (which includes DIP, 2LN and New Money) + the equity, the arithmetic supports our blended calculation of 65c/€ if we mark the equity at roughly 30c on face. At 42c/€ prices for the prepetition paper today, the implicit equity haircut is in line with the 30c/€ equity component being marked through.

- So we have no reason to change view based on this disclosure and will be updating accordingly.