S&P: KRONOS DOWNGRADED TO CCC+ ON WEAK EARNINGS; OUTLOOK NEGATIVE

S&P: KRONOS DOWNGRADED TO CCC+ ON WEAK EARNINGS; OUTLOOK NEGATIVE

S&P Downgrades Kronos Acquisition Holdings to ‘CCC+’ Amid Liquidity Strains and Operational Challenges

S&P Global Ratings has downgraded Kronos Acquisition Holdings Inc. to ‘CCC+’ from ‘B-’, citing deteriorating liquidity and operational performance driven by a September 2024 fire at its Conyers, Georgia, raw materials warehouse. The company reported a 30% year-over-year decline in EBITDA and an 8.8% revenue drop in Q1 2025, reflecting the incident’s impact on production and supply chain stability.

The rating agency also revised Kronos' senior secured debt rating to 'CCC+' from 'B-' and its unsecured debt to 'CCC-', while maintaining recovery ratings of '4' and '6', respectively. S&P highlighted a sharp worsening of financial metrics, including an S&P-adjusted debt-to-EBITDA ratio of approximately 15x for the twelve months ending April 4, 2025, and interest coverage falling below 1x.

In response to the fire, Kronos shifted production to its Ontario, California, facility and partnered with third-party manufacturers. However, operational ramp-up has lagged expectations, leading S&P to forecast weaker Q2 2025 pool season revenues compared to 2024. Management has abandoned plans to restart the Conyers facility and instead aims to construct a new manufacturing site by 2026, requiring $50 million in capital expenditures through Q1 2026.

Liquidity remains a critical concern. Despite holding $43 million in cash and $157 million in asset-based lending availability as of March 31, 2025, S&P projects free cash flow deficits to widen to $120–$125 million in 2025, up from prior estimates of $70–$90 million. The agency noted that ongoing Conyers-related costs and capital investments could further strain liquidity, with EBITDA interest coverage likely remaining below 1.5x.

S&P has placed Kronos on a negative outlook, warning that persistent operational challenges, wider cash flow deficits, or debt restructuring efforts could trigger further rating downgrades. Investors are advised to monitor the company's ability to restore EBITDA growth and manage liquidity amid elevated risks.

Investing.com, February 2026.