Germany-based plastic films producer Klockner Pentaplast said to set meeting with lenders to discuss its debt restructuring; if agreement isn't reached by March 21, company reportedly will be put up for sale while talks continue

LOS ANGELES , March 26, 2012 () –

The debt restructuring of Klockner Pentaplast Group was to be discussed at a meeting with lenders on March 23, according to two people with knowledge of the matter, reported Bloomberg Businessweek on March 19.

The Germany-based plastics films producer, which is owned by Blackstone Group LP, is seeking to restructure about €1.25 billion (US$1.6 billion) of debt.

If an agreement isn’t reached by March 21, Klockner Pentaplast is to be put up for sale while the talks continue, said the people, who asked not to be named because the negotiations are private, according to the March 19 Businessweek report.

Lazard & Co. would act as advisor in the sale. Lazard spokesperson Richard Creswell declined to comment, Businessweek reported on March 12.

Blackstone could lose control of Klockner Pentaplast, according to two people with knowledge of the situation who spoke with Businessweek but declined to be identified, according to the March 12 Businessweek report.

Senior lenders led by Oaktree Capital Management LP, Bank of Ireland and GE Capital propose taking 100% of Klockner Pentaplast in a debt-for-equity swap that would lower the company’s debt to less than €500 million.

If the lender-led restructuring plan moves forward, Blackstone’s private-equity unit would buy back some of the equity stake in Klockner Pentaplast from Los Angeles-based Oaktree, reported Businessweek on March 12.

The proposal would give Blackstone and Oaktree a majority stake in Klockner Pentaplast and wipe out the approximately €350 million in claims by all junior creditors, the people said, Businessweek reported on March 19.

Klockner Pentaplast, which was started in Montabaur, Germany, in 1965, breached the terms of its debt at the end of 2011 and lenders agreed to waiver the debt covenant until the end of June, according to the people.

London-based Blackstone spokesperson Helen Winning declined to comment, according to the March 19 Businessweek article.

Klockner Pentaplast is a leading producer of films for pharmaceutical, medical device, food, electronics, and general-purpose thermoform packaging, as well as offering printing and specialty applications, according to its website.

The primary source of this article is Bloomberg, New York, New York, on March 12 and 19, 2012.

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