S&P cuts Schur Flexibles

S&P said it lowered its ratings on Schur Flexibles GmbH to CC from CCC- and its term loan to C from CCC- and the loan recovery rating to 5 from 4 to reflect the implied recovery of these tranches upon closing.

Schur entered a lock-up agreement on June 3 with its key stakeholders to restructure its capital through new debt, a debt exchange and a debt-for-equity swap.

“The restructuring includes new loan provisions of up to €150 million by existing lenders. Schur Flexibles received €30 million of the loans in early June 2022 and expects to receive another €30 million in July-August 2022. €40 million will be made available at transaction closing, which we expect for September 2022. The new structure will include a €50 million loan for general corporate purposes. The existing senior facilities will be written-off to 25% of their outstanding amounts. The supply chain financing loan will be written-off to 35% of its current drawn amount,” S&P said in a press release.

The agency said it will view the transaction after it closes as a distressed exchange that will lead to a downgrade to SD or selective default.

The outlook is negative.

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