Research Update: Kronos Acquisition Holdings 'B-' ICR Affirmed On Asset Sale And Dividend Recapitalization; Outlook Stable; Debt Rated

Concord, Ontario-based Kronos Acquisition Holdings Inc. (KIK) has signed a deal to sell its automotive segment and also plans to recapitalize its balance sheet. We expect the company will pay sizable dividends and modestly reduce its balance sheet debt through these transactions. Pro forma for the transactions, we expect KIK's leverage will be elevated at about 8.4x (excluding the auto segment). However, we expect the company will significantly reduce its leverage to about 7.1x by year-end 2024 through a combination of the ramp-up of its Lake Charles facility and lower restructuring costs. We affirmed our 'B-' issuer credit rating on KIK. At the same time, we assigned our 'B-' issue-level rating and '4' recovery rating to its proposed first-lien secured

...- Concord, Ontario-based Kronos Acquisition Holdings Inc. (KIK) has signed a deal to sell its automotive segment and also plans to recapitalize its balance sheet. We expect the company will pay sizable dividends and modestly reduce its balance sheet debt through these transactions. - Pro forma for the transactions, we expect KIK's leverage will be elevated at about 8.4x (excluding the auto segment). However, we expect the company will significantly reduce its leverage to about 7.1x by year-end 2024 through a combination of the ramp-up of its Lake Charles facility and lower restructuring costs. - We affirmed our 'B-' issuer credit rating on KIK. At the same time, we assigned our 'B-' issue-level rating and '4' recovery rating to its proposed first-lien secured term loan and secured debt and our '###' issue-level rating and '6' recovery rating to its proposed unsecured debt. The '4' recovery rating indicates our expectation for average (30%-50%; rounded estimate: 45%) recovery in the event...

Research Update