Klöckner Pentaplast files for Chapter 11 bankruptcy protection

January 2026 | DEALFRONT | BANKRUPTCY & CORPORATE RESTRUCTURING

Financier Worldwide Magazine

January 2026 Issue

Klöckner Pentaplast (KP), a German manufacturer of rigid and flexible packaging and specialty films, has entered a restructuring support agreement (RSA) with a significant majority of its financial partners to implement a comprehensive financial restructuring plan.

The plan aims to reduce approximately €1.3bn (around $1.5bn) of funded debt, strengthening the company’s balance sheet and improving financial flexibility. To execute the RSA, KP and certain subsidiaries have voluntarily commenced a prepackaged Chapter 11 process in the US Bankruptcy Court for the Southern District of Texas.

The filing follows prolonged financial strain caused by declining demand across packaging divisions, a trend that began after the COVID-19 pandemic surge and persisted into 2025 amid tariff uncertainty and inflationary pressures. KP’s core markets, including consumer goods, pharmaceuticals and medical devices, experienced sharp sales declines during the post-pandemic downturn.

In connection with the Chapter 11 process, KP has secured commitments for €215m in new debtor-in-possession (DIP) financing from its financial partners. Interim court approval has been granted, enabling the company to access these funds alongside operating cash flow to support business continuity and meet obligations during restructuring. The DIP financing package also includes provisions for operational investments, allowing KP to prioritise critical maintenance and sustainability initiatives during restructuring. Management has emphasised that these funds will support ongoing innovation projects, particularly those focused on recycled-content packaging and compliance with emerging environmental regulations across key global markets.

Under the RSA, KP expects to pay vendors, suppliers and business partners in full for goods and services provided before and after the filing. The company has filed customary first-day motions to maintain uninterrupted operations and uphold commitments to employees, customers and stakeholders.

Entities in Argentina, Belarus, Brazil, Canada, China, Czech Republic, Egypt, India, Italy, Jersey, Mexico, Poland, Portugal, Russia, Switzerland, Thailand, Turkey and the UAE are excluded from the US Chapter 11 process. Certain KP entities in Germany, Luxembourg, the Netherlands, Spain, the UK and the US are also not part of the filing.

“The steps we are taking today will provide KP with new owners and a stronger financial foundation to continue driving innovation, delivering sustainable packaging and films, and responding to the needs of our customers with agility and excellence,” said Roberto Villaquiran, chief executive of KP. “Our operations worldwide are continuing without interruption, and the support of our financial partners demonstrates their confidence in our business and the opportunities ahead.”

Founded in Montabaur, Germany, in 1965, KP operates 27 plants in 16 countries and employs more than 5000 people. The company is marking its 60th anniversary in 2025. Its product portfolio serves pharmaceutical, medical device, food, beverage and card sectors, with a growing emphasis on sustainability and recycled-content packaging.

Prior to the Chapter 11 filing, KP faced mounting challenges including rising energy and raw material costs and significant working capital outflows driven by changing supplier payment terms. Efforts to extend debt maturities earlier in 2025 did not result in additional equity injections, leaving the company with a highly leveraged balance sheet.

Upon completion of the restructuring, ownership will transfer to a group of first-lien lenders under a debt-for-equity swap, while existing shareholders will exit. Second-lien creditors are expected to receive limited recovery. The process is designed to conclude swiftly, with a second-day hearing scheduled for 3 December 2025 and a voting deadline on 11 December 2025.

Industry analysts note that KP’s restructuring reflects broader pressures in the European plastics sector, where profitability has weakened amid rising costs and regulatory demands. Observers expect the reorganisation to position KP for long-term stability, enabling reinvestment in innovation and sustainable packaging solutions.

Richard Summerfield