The Keter Group, a global plastic products manufacturer, is amid a financial crisis, with nearly 100 employees laid off. Alejandro Pena Keter, the American CEO, was appointed in 2018 to lead the company to a successful Nasdaq IPO, but the IPO was eventually canceled. Pena’s actions, which included a failed IPO and a debt restructuring plan, resulted in Moody’s downgrading Keter’s credit rating for the second time in four months.
To add to the company’s current problems, Moody, a globally-renowned rating agency has lowered their rating further. This comes amid Keter Group’s ongoing financial difficulties and employee layoffs. Pena had planned to list the company in September 2021 but had not received positive market indications about its valuation.
BC Partners paid $1.4 billion for the company in 2016, with the fund purchasing 80% of the shares for a total value of $1.7 billion. Moody’s credit rating was downgraded due to the weight of loans taken out by BC Partners for the acquisition.
CEO Alejandro Pena Keter Under Fire After IPO Failure
The IPO failed after Keter received negative signals from the institutional market in the United States about the value of the IPO. Keter hoped for a valuation of more than $3 billion.
Pena had no choice but to postpone the IPO, and he made that decision a year ago, even before the global economic crisis began. The offering appeared to be simply postponed initially, but market indications did not improve, and the offering was ultimately canceled. As part of the ongoing crisis at Keter Plastic, the company fired nearly 100 employees. Calcalist has learned that most fired employees are based in Israel, both from the government and the private sector.
The firings come on the heels of the group’s American CEO, Alejandro Pena Keter, failing to lead the company to an IPO. The IPO was supposed to involve selling controlling owners’ shares and the injection of capital into the company’s coffers, totaling nearly $800 million. The IPO failed after Keter received negative signals from the institutional market in the United States about the value of the IPO. Keter hoped for a valuation of more than $3 billion.
Alejandro Pena Keter’s Q3 2021 Revenue Increases, But Losses Continue to Grow
Keter had been preparing for the IPO for two years and had enlisted the help of investment banks JP Morgan, Goldman Sachs, Bank of America, and Jefferies. Pena, who was appointed in February 2018, took over for Jonathan Kolodny, who had been in the position for a year and a half after BC Partners acquired the company. When Pena was appointed, the owners tasked him with leading the company to a successful Nasdaq IPO.
Employees are now paying the price for Pena’s failure. Approximately 100 Keter employees were let go in recent weeks as part of efficiency measures that included cost-cutting across the board. The workers were fired following a lengthy and contentious negotiation with the National Histadrut and the company’s workers’ committee chairman, Petar Shahada. During the talks, the National Histadrut, representing approximately 1,500 of the company’s employees, agreed on a series of efficiency and cost-cutting actions to reduce the number of layoffs.
Keter’s most recent data, included in the prospectus, presented the company’s results for the third quarter of 2021. While Keter’s revenue increased by more than 20% to 375 million euros, losses continued to rise. The company recorded losses of 35.3 million euros, compared to 17.8 million euros in the same quarter in 2020.
The Decline of Keter Group Under CEO Alejandro Pena Continues
The fall of Keter Group under CEO Alejandro Pena continues, with Moody’s downgrading the company’s credit rating from Caa1 to Caa2 for the second time in four months.
Keter reported 1.6 billion euros in revenue and 167 million euros in EBITDA in 2022. According to Moody’s, Keter’s sales increased by 3.7% in 2022, primarily in the first half of the year. Keter is a private company that has stopped publishing financial reports following the failure of its IPO attempt. However, analysts predict that adjusted EBITDA will fall to approximately 144 million euros in 2022, down from 203 million euros in 2021.
According to the review, the company has sufficient liquidity to continue financing its activities as of December 2022. It has liquid capital of 63 million euros (cash and cash equivalents), an unused credit of 102 million euros, and an additional 31 million euros against future income and inventory. The company’s liquidity improved during 2023, but the amount of liquid capital was not disclosed.
Considering the increasingly challenging environment across global markets, Keter is taking responsible measures to ensure financial health and continued company growth,” said CEO Alejandro Pena Keter. Keter will do everything possible to find job opportunities for those affected.
Conclusion
The Keter Group, a global manufacturer of plastic products, is experiencing financial difficulties, including a failed IPO and a debt restructuring plan, prompting Moody’s to downgrade its credit rating for the second time in four months.
Employees are now paying the price of the impacts of Pena’s failure. In recent weeks, approximately 100 Keter employees were laid off as part of efficiency measures that included cost-cutting across the board. The company’s most recent financial data shows increased revenue but continued losses. Despite having enough liquidity to fund its operations, Keter’s future remains uncertain under Pena’s leadership.
