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Kloeckner Pentaplast’s refinancing negotiations have been complicated by the discovery of a “liquidity hole” in the German packaging producer’s balance sheet, according to 9fin sources.

Creditors were informed of a cash shortfall in Kloeckner’s balance sheet at the start of the month, sources familiar with the situation said, but they refused to comment on the amount of money the company needs and the reason for this sudden cash need. One source said that the shortfall was blamed on tariff impacts.

Strategic Value Partners, who leads a group of investors in the business, was planning on injecting €275m of debt and equity into Kloeckner to aid with the refinancing of the packaging firm’s roughly €1.7bn of senior debt maturing next year. SVP planned on providing Kloeckner with around €75m of equity and €200m of new debt, the proceeds of which would be used to pay down around €125m of outstanding debt.

One market participant told 9fin that they were hoping the equity component of the deal would be bigger than what SVP offered. The proposals were also €25m shy of the €300m lenders had requested SVP inject into the business in exchange for extending the maturities of their debt.

But, in light of the cash shortfall, SVP, Kloeckner, and the firm’s creditors have returned to the negotiating table to hash out alterations to SVP’s proposed financial support to allow the company to refinance its debt, sources said.

SVP has been “working constructively” with both the company and its lenders, and remains very supportive of Kloeckner and its management, a second source familiar with the situation said.

Gibson Dunn, Hengeler Mueller and Houlihan Lokey are advising the group of secured creditors. Kirkland & Ellis and PJT are advising the company, as 9fin reported.

SVP and PJT declined to comment. K&E, Houlihan, and Gibson Dunn were approached for comment.