Seqens Creditors Form Ad Hoc Group; Legal Advisors to Pitch This Week

An ad hoc group of creditors to French pharmaceutical solution and specialty chemicals producer Seqens has formed and will begin taking legal advisory pitches later this week, sources told Octus. The group includes some of the largest lenders like Alcentra, Carlyle, Blackstone and Barings, the sources added.

Last week, Seqens’ loans dropped around nine points after it published weak second-quarter results, with EBITDA down 24% year over year and liquidity dwindling amid continued cash burn, sources said at the time.

The group’s term loan is quoted at 45/48 today, down from 53/55 a week ago, according to S&P Price Viewer.

Seqens generated €196 million of sales during the second quarter, which was below the €227.2 million budgeted and the €246.9 million comparable pro forma sales it achieved during the same quarter last year. EBITDA reached €21.1 million, missing the €29.4 million budgeted and down from the €27.7 million comparable pro forma EBITDA it generated the second quarter last year, driven by weakness in its Upstream and Solvents segments.

The group generated €27.8 million of negative net free cash flow during the quarter as a result of the earnings slump and a working capital build-up. It expects to reduce inventories by around €12 million in the second half to shore up liquidity.

Seqens ended June with €11 million of cash (excluding €39 million held by its CellForCure venture and an additional €17 million of short-term investments, which do not qualify as “cash” as per IFRS rules but are available to the business) and €65 million available under its €130 million RCF. The revolver is subject to an 8.8x senior secured net leverage test when the facility is more than 40% drawn net of cash.

Senior facilities agreement, or SFA, adjusted senior secured net leverage jumped to 10.1x from 8.7x as of March, which means that Seqens would breach the RCF covenant if tested, limiting its ability to draw down the facility much further, sources said. Actual net leverage based on €95.8 million LTM March reported EBITDA was 10.9x.

Seqens has been underperforming due to a slump in the group’s core para-aminophenol, or PAP, market as a result of continued overcapacity following the start-up of Chinese producer Bayi’s new plant last year, the arrival of a new Chinese producer as well as Indian producers.

Management had been guiding to €108 million EBITDA this year, a roughly 2% drop, and previously said that it expects 2025 to be a transition year and EBITDA to recover in 2026, growing around 20% over the next four years to €225 million by the end of 2028.

Seqens’ capital structure, as of June 30 2025, is below:
 

According to Octus’ CLO database, Seqens’ loans are held by the following managers. Click HERE to see the full list of holders in the database.
 

Sponsor SK Capital owns a 76.9% stake in Seqens, while previous sponsors Eurazeo, Ardian, Mérieux Equity Partners and Eximium own a minority stake.

To see the covenant analysis or to talk to one of our legal analysts, click HERE. A private company analysis of Seqens is available HERE.